Interest rates
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Discount Rates, Debt Maturity, and the Fiscal Theory
Do bond risk premiums influence the effects of debt maturity operations? Using a model with realistic bond risk premiums, we show that maturity operations have sizable effects on expected inflation and output when the central bank passively responds to inflation and the fiscal authority weakly responds to the debt level. -
November 23, 2021
Checking up on Canada’s financial system
Deputy Governor Paul Beaudry speaks about the strength and resilience of the financial system throughout the COVID-19 pandemic and economic recovery. He also outlines key vulnerabilities and risks going forward. -
November 23, 2021
Financial stability through the pandemic and beyond
Deputy Governor Paul Beaudry provides an update on financial vulnerabilities and risks in Canada, including those stemming from the COVID-19 pandemic. -
Evaluating the Effects of Forward Guidance and Large-scale Asset Purchases
I propose a novel method to identify and estimate the macroeconomic effects of forward guidance and large-scale asset purchases (LSAP) for each FOMC announcement. I find that LSAP is more important than forward guidance in influencing output and inflation. LSAP puts upward pressure on short-term yields, so it should always be used in conjunction with forward guidance. -
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. -
Monetary Policy, Trends in Real Interest Rates and Depressed Demand
Over the last few decades, real interest rates have trended downward. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors. We explore the claim that these trends may have been amplified by certain features of monetary policy. -
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.