Business fluctuations and cycles
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An Optimal Macroprudential Policy Mix for Segmented Credit Markets
How can macroprudential policy and monetary policy stabilize segmented credit markets? Is there a trade-off between financial stability and price stability? I use a theoretical model to evaluate the performance of alternative policies and find the optimal mix of macroprudential and monetary policy in response to aggregate shocks. -
ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis
ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution. -
A New Measure of Monetary Policy Shocks
Combining various high frequency financial data with central bank projections, I construct a new measure of monetary policy shocks not predictable by the public information preceding a central bank’s announcements. I then study the causal effects of monetary policy on the macro economy. -
June 10, 2021
Going digital has helped the economy through COVID-19
Deputy Governor Timothy Lane talks about the Bank’s decision yesterday to leave the policy rate unchanged. He also discusses how adopting digital technologies supported resilience during the COVID-19 pandemic. -
June 10, 2021
The digital transformation and Canada’s economic resilience
Deputy Governor Tim Lane talks about the Bank’s latest interest rate announcement and discusses how the digital transformation has supported resilience through the pandemic and may be adding to the economy’s growth potential. -
Can regulating bank capital help prevent and mitigate financial downturns?
Countercyclical capital buffers are regulatory measures developed in response to the global financial crisis of 2008–09. This note focuses on how time-varying capital buffers can improve financial stability in Canada -
Occasionally Binding Constraints in Large Models: A Review of Solution Methods
Solving macroeconomic models is difficult. One challenge is the occasionally binding constraint of the zero lower bound on nominal interest rates. This paper reviews various ways to solve models that include this feature. -
Imperfect Banking Competition and Macroeconomic Volatility: A DSGE Framework
How do banks adjust their loan rate markup in response to macroeconomic shocks? -
The Bank of Canada COVID‑19 stringency index: measuring policy response across provinces
We construct an index that systematically measures and tracks the stringency of government policy responses to the COVID-19 pandemic across Canadian provinces. Researchers can use this stringency index to analyze how the pandemic is affecting the economy.