Brief articles explaining various topics related to the Bank of Canada's main functions:
What is Money?
Defines money, Outlines its main functions and explains why confidence in money is essential for it to serve those functions.
Defines seigniorage as the revenue earned from the issue of new money and explains it in the Canadian context.
Canada's Money Supply
Describes the main measures of Canada’s money supply, explains how interest rates affect the growth of the supply of money and Explains why the Bank monitors this growth.
Explains the purpose of monetary policy and describes how it works.
Target For The Overnight Rate
Defines this important policy interest rate and describes the role it plays in influencing various market interest rates.
How Monetary Policy Works: The Transmission of Monetary Policy
Explains the process by which changes in the policy interest rate work their way through the economy and ultimately affect the rate of inflation.
Explains what the Bank Rate is and its relationship to the target for the overnight rate.
Outlines the factors that affect interest rates for commercial loans.
Inflation and Price Stability
Defines inflation and price stability and describes their consequences as well as why the Bank aims to keep inflation low and stable.
Benefits of Low Inflation
Outlines the costs of high inflation and the benefits of low inflation.
Explains Canada’s inflation-control target and its benefits.
Why has Canada's inflation target been set at 2 per cent?
Describes the potential problems that a higher or lower inflation target might entail.
Consumer Price Index
Explains this key indicator of inflation.
Measurement Bias in the Canadian Consumer Price Index (CPI)
Describes possible sources of bias in the CPI, and explains why changes in this indicator may not always provide an accurate measure of actual changes in the cost of living.
Defines this key economic indicator and explains its importance for monetary policy.
Disinflation and Deflation
Defines these sometimes-confused terms and describes the monetary policy response to deflation.
Defines this important economic concept, describes different measures of productivity, explains how productivity affects living standards, and summarizes the reasons behind Canada’s disappointing productivity record.
Canadian Financial System
Explains why a sound financial system is critical to a well-functioning economy and provides links to further information about Canada’s financial system.
Regulation of the Canadian Financial System
Describes the shared responsibility for the regulation of the Canadian financial system and summarizes the Bank of Canada’s role in the financial system.
Large Value Transfer System
Describes this important funds-transfer system and explains the Bank of Canada’s oversight role.
Household Spending and Debt
Highlights the value of ‘prudent’ borrowing in enhancing welfare, but also the risks of over-indebtedness for households, the economy and financial stability. Discusses trends in household debt, various debt metrics and why monetary policy is concerned with how households use borrowed funds.
Outlines the factors that influence the exchange rate and explains the role of the exchange rate in monetary policy.
Intervention in the Foreign Exchange Market
Explains why intervention in the foreign exchange market might be considered and explains the mechanics of such intervention.