E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• The Bank of Canada’s “Horse Race” of Alternative Monetary Policy Frameworks: Some Interim Results from Model Simulations

  Staff Discussion Paper 2021-13 José Dorich, Rhys R. Mendes, Yang Zhang

  Bank of Canada staff are running a “horse race” of alternative monetary policy frameworks in the lead-up to 2021 renewal of the Bank’s monetary policy framework. This paper summarizes some interim results of model simulations from their research.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Economic models, Inflation targets, Monetary policy, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E2, E27, E3, E4, E5, E52, E58

• The uneven economic consequences of COVID 19: A structural analysis

  Staff Analytical Note 2021-17 Martin Kuncl, Austin McWhirter, Alexander Ueberfeldt

  Using a structural model, we study the economic consequences of the COVID-19 shock. The uneven consequences, such as higher unemployment among young households, amplify the negative implications for the macroeconomy, household vulnerabilities and consumption inequality. Government support programs have stimulated the economy and lowered inequality and medium-term vulnerabilities.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Fiscal policy, Monetary policy JEL Code(s): E, E2, E20, E5, E52, E6, E62

• Monetary Policy and the Persistent Aggregate Effects of Wealth Redistribution

  Staff Working Paper 2021-38 Martin Kuncl, Alexander Ueberfeldt

  Monetary policy in the presence of nominal debt and labour supply heterogeneity creates a policy trade-off: a short-term economic stimulus leads to persistently reduced output over the medium term. Price-level targeting weakens this trade-off and is better able to stabilize inflation and output than inflation targeting.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy framework, Monetary policy transmission JEL Code(s): E, E2, E21, E5, E50