Gazing at r-star: A Hysteresis Perspective Staff Working Paper 2023-5 Paul Beaudry, Katya Kartashova, Césaire Meh Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets. Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Inflation and prices, Inflation targets, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E2, E21, E3, E31, E4, E43, E5, E52, E58, E6, E62, G, G5, G51, H, H6
Are Temporary Oil Supply Shocks Real? Staff Working Paper 2022-52 Johan Brannlund, Geoffrey R. Dunbar, Reinhard Ellwanger Hurricanes disrupt oil production in the Gulf of Mexico because producers shut in oil platforms to safeguard lives and prevent damage. We examine the effects of these temporary oil supply shocks on real economic activity in the United States. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Inflation and prices JEL Code(s): E, E3, E31, E32, Q, Q3, Q31, Q4, Q41, Q43
CANVAS: A Canadian Behavioral Agent-Based Model Staff Working Paper 2022-51 Cars Hommes, Mario He, Sebastian Poledna, Melissa Siqueira, Yang Zhang The Bank of Canada’s current suite of models faces challenges in addressing network effects that integrate household and firm-level heterogeneity and their behaviours. We develop CANVAS, a Canadian behavioural agent-based model to contribute to the Bank’s next-generation modelling effort. CANVAS improves forecasting performance and expands capacity for model-based scenario analysis. Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Econometric and statistical methods, Economic models, Firm dynamics, Inflation and prices JEL Code(s): C, D, D2, D22, D8, D83, E, E1, E17
Understanding Post-COVID Inflation Dynamics Staff Working Paper 2022-50 Martin Harding, Jesper Lindé, Mathias Trabandt We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. Our model can generate more sizable inflation surges due to cost-push and demand shocks than a standard linearized model when inflation is high. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Central bank research, Coronavirus disease (COVID-19), Economic models, Inflation and prices, Inflation: costs and benefits, Monetary policy, Monetary policy implementation JEL Code(s): E, E3, E30, E31, E32, E37, E4, E44, E5, E52
December 12, 2022 Putting the resolute in resolutions: Looking ahead to lower inflation Remarks Tiff Macklem Business Council of British Columbia Vancouver, British Columbia Bank of Canada Governor Tiff Macklem discusses the important lessons from 2022 and explains what the Bank is doing to restore price stability for Canadians. Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Inflation and prices, Interest rates, International topics, Monetary policy, Recent economic and financial developments
December 12, 2022 Reflections on 2022 Speech summary Tiff Macklem Business Council of British Columbia Vancouver, British Columbia Governor Tiff Macklem discusses the important lessons from events in 2022 and what the Bank is doing to restore price stability for Canadians. Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Coronavirus disease (COVID-19), Inflation and prices, Interest rates, International topics, Monetary policy, Recent economic and financial developments
December 8, 2022 Economic progress report: More transparency in uncertain times Remarks Sharon Kozicki Urban Development Institute of Quebec Montréal, Quebec Speaking a day after the Bank of Canada’s latest interest rate decision, Deputy Governor Sharon Kozicki discusses the current state of the economy and talks about how the Bank is improving both its use of data and the way we communicate with Canadians. Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Inflation and prices, Interest rates, Monetary policy and uncertainty
December 8, 2022 Helping Canadians better understand our decisions Speech summary Sharon Kozicki Urban Development Institute of Quebec Montréal, Quebec Speaking a day after the Bank of Canada decided to raise our policy interest rate, Deputy Governor Sharon Kozicki discusses the current state of the economy. She also talks about how we are improving our transparency with Canadians. Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Inflation and prices, Interest rates, Monetary policy and uncertainty
November 22, 2022 Monitoring the health of Canada’s financial system Speech summary Carolyn Rogers Young Canadians in Finance Ottawa, Ontario Senior Deputy Governor Carolyn Rogers discusses risks and vulnerabilities in our financial system and what the Bank of Canada is doing to support financial stability. Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Financial stability, Housing, Inflation and prices, Recent economic and financial developments
November 22, 2022 Financial stability in times of uncertainty Remarks Carolyn Rogers Young Canadians in Finance Ottawa, Ontario Senior Deputy Governor Carolyn Rogers discusses the Bank’s work to monitor risks and vulnerabilities in Canada’s financial system and support greater financial stability. Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Financial stability, Housing, Inflation and prices, Recent economic and financial developments