Exchange rates
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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. -
February 16, 2023
Our commitment to 2% inflation
Deputy Governor Paul Beaudry explains why the 2% target remains the centrepiece of the Bank of Canada’s inflation-targeting framework. -
February 16, 2023
No two ways about it: Why the Bank is committed to getting back to 2%
Deputy Governor Paul Beaudry discusses the benefits of being near the Bank’s 2% inflation target and the dangers of straying from it for too long. -
February 7, 2023
Monetary policy at work
Bank of Canada Governor Tiff Macklem explains how recent interest rate increases work their way through the Canadian economy to slow demand and bring inflation down. -
February 7, 2023
Higher interest rates are working
Governor Tiff Macklem explains how the Bank of Canada’s increases to the policy interest rate will cool the economy and bring inflation down. -
Stress Relief? Funding Structures and Resilience to the Covid Shock
Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.