Monetary policy transmission
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September 19, 2023
Household differences and monetary policy
Deputy Governor Sharon Kozicki talks about how differences in debt, income and savings across households shaped their experience through the COVID-19 pandemic and how this is affecting monetary policy now. -
September 19, 2023
Rebalancing the economy while managing risks
Bank of Canada Deputy Governor Sharon Kozicki talks about how household differences have affected the way that monetary policy is transmitted. She also discusses how the Bank is considering the role of mortgage interest costs in inflation. -
September 7, 2023
Staying the course
Speaking a day after we decided to maintain the policy interest rate at 5%, Governor Tiff Macklem explores some key factors behind the decision. He also explains why the 2% inflation target supports a stable economy and greater prosperity for households and businesses. -
September 7, 2023
Economic progress report: Target in sight, but we’re not there yet
Bank of Canada Governor Tiff Macklem talks about the Bank’s latest interest rate announcement and what’s happening with inflation beyond the headline numbers. He also discusses why the Bank’s 2% inflation target is the right one. -
A Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight
This paper studies exchange rate dynamics by incorporating bounded rationality, that is, limited foresight, in a small open-economy model. This behavior of limited foresight helps explain several observations and puzzles in the data of exchange rate movements. -
Digitalization: Implications for Monetary Policy
We explore the implications of digitalization for monetary policy, both in terms of how monetary policy affects the economy and in terms of data analysis and communication with the public. -
It takes a panel to predict the future: What the stock market says about future economic growth in Canada
Valuation ratios in the Canadian stock market can help reveal investors’ expectations about future economic growth because the impact of economic growth on valuation ratios can vary across industries. We find that this variation helps produce accurate forecasts of future growth of real gross domestic product in Canada. The forecasts from our model declined by just over 3 percentage points between January 2022 and February 2023—a period when the Bank of Canada rapidly increased the overnight rate. As well, we find that interest-rate-sensitive industries had an outsized contribution to this expected slowdown in growth. -
Monetary Policy Transmission, Bank Market Power, and Wholesale Funding Reliance
I study how banking market concentration and reliance on wholesale funding affect monetary policy transmission to mortgage rates. I find that this transmission is imperfect and dampens the response of consumption, output, and housing prices. -
June 8, 2023
Economic progress report: Are we entering a new era of higher interest rates?
Deputy Governor Paul Beaudry discusses the latest interest rate decision and suggests reasons why longer-term interest rates could remain higher than they were before the pandemic.