Monetary policy

• February 7, 2023

  Monetary policy at work

  Remarks Tiff Macklem CFA Québec Québec, Québec

  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.

  Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments
• February 7, 2023

  Higher interest rates are working

  Speech summary Tiff Macklem CFA Québec Québec, Québec

  Governor Tiff Macklem explains how the Bank of Canada’s increases to the policy interest rate will cool the economy and bring inflation down.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments

• (Un)Conventional Monetary and Fiscal Policy

  Staff Working Paper 2023-6 Jing Cynthia Wu, Yinxi Xie

  We build a tractable New Keynesian model to study and compare four types of monetary and fiscal policy: policy rate adjustments, quantitative easing, lump-sum fiscal transfers and government spending. We find that tax-financed fiscal policy is more stimulative than debt-financed policy, and optimal policy coordination needs at least two of these four policy instruments.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Fiscal policy, Monetary policy JEL Code(s): E, E4, E6, E61, E62, E63

• The 2021–22 Surge in Inflation

  Staff Discussion Paper 2023-3 Oleksiy Kryvtsov, James (Jim) C. MacGee, Luis Uzeda

  The rise in inflation in 2021–22 sparked a growing literature and debate over the causes of the surge as well as the near- and medium-term path for inflation. This review offers three key messages.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Inflation and prices, Inflation targets, Monetary policy JEL Code(s): E, E3, E31, E5, E52, E58

• Gazing at r-star: A Hysteresis Perspective

  Staff Working Paper 2023-5 Paul Beaudry, Katya Kartashova, Césaire Meh

  Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Fiscal policy, Inflation and prices, Inflation targets, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E2, E21, E3, E31, E4, E43, E5, E52, E58, E6, E62, G, G5, G51, H, H6