Global potential output growth
This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates serve as key inputs to the analysis supporting the April 2024 Monetary Policy Report.
Global potential output growth is assessed to have mostly recovered from its COVID-19 pandemic low, rising from 2.1% in 2020 to an estimated 3.0% in 2024.1 This increase is largely driven by a recovery in oil-importing emerging-market economies (EMEs), which are experiencing a gradual easing of pandemic-related downward pressures on capital accumulation and total factor productivity (TFP) growth (Chart 1 and Chart 2). Potential output growth has mostly returned to pre-pandemic average levels in all regions except China, where it is estimated to have steadily declined.
Looking ahead, we expect global potential output growth to edge down to 2.9% in 2027 (Table 1). This modest decrease mainly reflects slowing growth in trend labour input (TLI) amid the rapid aging of the global population. Aging is also expected to weigh on labour productivity, although in some countries, shifts in the age composition of the workforce toward more productive cohorts may help dampen the effects (Guénette and Shao, forthcoming).2
Compared with last year’s assessment, global potential output growth has been revised up by 0.2 percentage points (pps), on average, over 2023–26. This mostly reflects stronger-than-expected capital accumulation in oil-exporting economies in addition to positive revisions to trend labour force participation in the United States and oil-importing EMEs.
Chart 1: Global potential output growth has recovered
Chart 2: Improvements in capital deepening are contributing to an increase in global potential output growth
Table 1: Projection for potential output growth
| Share of real global GDP* (%) | Projected growth† (%) | ||||||
|---|---|---|---|---|---|---|---|
| 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | ||
| United States | 16 | 2.0 (1.7) | 2.3 (1.8) | 2.3 (1.8) | 2.2 (1.8) | 2.1 (1.7) | 2.1 |
| Euro area‡ | 12 | 0.9 (0.8) | 1.3 |
1.2 |
1.1 |
1.1 |
1.1 |
| Japan | 4 | 0.6 |
0.6 |
0.6 (0.7) | 0.7 (0.8) | 0.7 |
0.7 |
| China | 19 | 4.8 |
4.6 (4.7) | 4.3 (4.5) | 4.1 (4.3) | 3.9 (4.2) | 3.8 |
| Oil-importing EMEs§ | 33 | 3.3 |
3.6 (3.5) | 3.9 (3.7) | 4.1 (3.7) | 4.1 (3.9) | 4.1 |
| Rest of the world◊ | 17 | 1.3 (0.7) | 1.9 (1.3) | 2.1 (1.7) | 2.1 (1.7) | 2.0 (1.8) | 2.0 |
| World | 100 | 2.7 (2.5) | 2.9 (2.7) | 3.0 (2.8) | 3.0 (2.8) | 2.9 (2.8) | 2.9 |
* GDP shares are based on International Monetary Fund (IMF) estimates of the purchasing-power-parity valuation of country GDPs for 2022 from the IMF’s October 2023 World Economic Outlook. The individual shares may not add up to 100 due to rounding.
† Numbers in parentheses are projections used in the April 2023 Monetary Policy Report and are reported only when different from the current projection.
‡ Croatia joined the euro area on January 1, 2023. The current projection and historical data include the change in membership.
§ The oil-importing emerging-market economies (EMEs) grouping excludes China. It is composed of large EMEs from Asia, Latin America, the Middle East, Europe and Africa (such as India, Brazil and South Africa) as well as newly industrialized economies (such as South Korea).
◊ “Rest of the world” is a grouping of other economies not included in the first five regions. It is composed of oil-exporting EMEs (such as Russia, Nigeria and Saudi Arabia) and other advanced economies (such as Canada, the United Kingdom and Australia).
Regional estimates for potential output growth
United States
US potential output growth is expected to increase from 2.0% in 2022 to 2.3% in 2024 before slowing to 2.2% in 2025 and 2.1% in 2026 (Chart 3). The pickup from 2022 to 2024 is due to an increase in TLI growth, driven by strong projected net immigration. The gradual decline after 2024 largely reflects a slower pace of immigration contributing to slower TLI growth. However, over the same period, rising trend TFP growth provides a partial offset to the decline in TLI growth, as trend TFP growth continues to recover toward its long-term average. Additionally, we expect the increase in immigration to be a marginal boost to trend TFP growth by 2027. Recent immigrants, on average, have higher educational attainment and are more likely to be in their prime working age than individuals born in the United States, resulting in a stronger demographic contribution from more productive age cohorts (Guénette and Shao, forthcoming).
Chart 3: US potential output growth is projected to peak in 2024 due to stronger trend labour input
Relative to the April 2023 assessment:
- Potential output growth has been revised up by about 0.5 pps, on average, over 2023 and 2024 and by 0.4 pps over 2025 and 2026. The level of potential output is higher by 2% in 2026.3 The upward revision over the projection mainly reflects stronger population growth and a higher trend labour force participation rate (LFPR).
- Population growth is higher by 0.3 pps, on average, over 2023–26 because of a higher level of projected net immigration due to a notable increase in undocumented immigrants over the same period.4 Given the uncertainty around immigration, we present alternative scenarios in Box 1 to illustrate the effects of immigration on our outlook for potential output growth.
- Trend LFPR has been revised up by 1.2 pps, on average, over 2023–26 due to stronger LFPRs projected among foreign-born individuals and prime-working-age women. In 2023, the LFPR of these two groups increased by 0.6 pps and 0.8 pps, respectively, compared with 2019.5 We expect this resilience to remain, given the increasing share of foreign-born people in the working-age population and the improved work flexibility that has allowed women to remain attached to the labour force.6
- Stronger trend TFP growth also explains one-quarter of the upward revision in 2026, with higher immigration expected to contribute to the gradual increase in trend TFP growth over the long run.7
Box 1: Alternative immigration scenarios for the outlook for US potential output growth
Box 1: Alternative immigration scenarios for the outlook for US potential output growth
We present two alternative scenarios to assess the sensitivity of our outlook to immigration (Table 1-A). These scenarios are based on a +/-1 standard deviation of annual net immigration from 1984 to 2019, estimated to be about 0.4 million, from our base-case average assumption of 2.2 million over 2024 to 2027.
- Our base case assumes that net immigration increases from 0.8 million in 2020 to 3.3 million over 2023 and 2024 and averages about 1.8 million per year from 2025 to 2027 (Chart 1‑A). This leads to an average trend population growth rate of 1.1% over 2024–27.8
- In the low immigration scenario, trend population growth averages 1.0%, slightly lower than in the base case. In the high immigration scenario, trend population growth averages 1.2%, slightly stronger than in the base case.
- Higher net immigration should support a higher trend labour force participation rate (LFPR) because foreign-born individuals have a higher LFPR than individuals born in the United States (Chart 1‑B). This gap has widened since the start of the pandemic because the share of older US-born workers who have left the labour force is larger compared with before the pandemic. In our base case, the trend LFPR averages 62.4% from 2024 to 2027. In the low immigration scenario, it edges lower to 62.3%, while in the high immigration scenario it edges up to 62.5%.
- In our base case, trend total factor productivity (TFP) growth is forecast to average about 1.1% between 2024 and 2027. Higher immigration is estimated to contribute about 0.04 percentage points to this by 2027. Given that this impact is marginal, trend TFP growth would still average 1.1% in both the low and high immigration scenarios.
- Altogether, the changes in trend population growth and the participation rate under these scenarios result in potential output growth ranging from a low of 2.1% to a high of 2.3%.
Chart 1-A: Net immigration is expected to stay elevated in 2023 and 2024
Chart 1-B: The labour force participation rate is higher for foreign-born individuals than for US-born people, and the gap is widening
Table 1-A
| Potential output growth | Trend participation rate | Trend population growth | Trend total factor productivity growth | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Base case | Low immigration | High immigration | Base case | Low immigration | High immigration | Base case | Low immigration | High immigration | Base case | Low immigration | High immigration | |
| 2024–27 | 2.2% | 2.1% | 2.3% | 62.4% | 62.3% | 62.5% | 1.1% | 1.0% | 1.2% | 1.1% | 1.1% | 1.1% |
Euro area
Potential output growth in the euro area is estimated to have recovered in 2023 because the drag from high energy prices on trend TFP growth has dissipated. Over the projection, potential output growth is expected to moderate from 1.3% in 2023 to around 1.1% over 2024–27 (Chart 4). This reflects declining TLI growth due to population aging. However, the decline is partly offset by steady capital deepening, supported by expanding private and public investments that are partly linked to decarbonization. Trend TFP growth is estimated to have declined sharply from 2018 to 2022 because of persistent downward pressures associated with Brexit, the COVID-19 pandemic and the energy crisis sparked by Russia’s invasion of Ukraine. Looking ahead, we expect trend TFP growth to improve gradually, partly supported by the implementation of structural reforms through the European Commission’s Recovery and Resilience Facility.
Compared with the April 2023 assessment, potential output growth for the euro area is roughly unchanged from 2023 to 2027. A stronger contribution from TLI, linked to higher population projections from the European Commission, is offset by weaker trend TFP growth. The downward revision to trend TFP reflects a reassessment of various headwinds to productivity in the euro area, including elevated economic uncertainty, labour market frictions and a significant regulatory burden. A smaller drag from energy prices relative to last year’s estimate provides a partial offset.9
Chart 4: Potential output growth in the euro area is expected to moderate as trend labour input growth declines
China
Potential output growth in China is expected to gradually decline over the projection horizon, falling from 4.6% in 2023 to an average of 4.0% over 2024–27 (Chart 5). TLI is expected to contract steadily over 2024–27, reflecting the shrinking size of the workforce due to population aging. Additionally, capital deepening is expected to decline because of spillovers from the property sector and limited capacity for investments due to high levels of public debt. Lastly, uncertainty about domestic policy, geopolitical tensions with advanced economies, and demographic shifts are expected to weigh on trend TFP growth over the coming years. Indeed, China’s TFP growth prospects are particularly uncertain (see Box 2).
Relative to the April 2023 assessment, China’s potential output growth is weaker by 0.1 pp, on average, over 2020–23 and by 0.3 pps, on average, over 2024–26. Overall, the level of potential output is 1.2% lower in 2026. The downward revisions over the projection horizon mainly reflect a reduction in trend TFP growth due to downward pressures from domestic policy and shifts in demographics.
Domestic policy and the ongoing decoupling from Western economies likely contributed to the sharper-than-expected decline in foreign direct investment in 2023. We expect these headwinds to persist, throttling the pace of technological diffusion over the projection.
Similarly, a less favourable age composition of the workforce and an increase in the ratio of older, economically dependent individuals to the working-age population are expected to further weigh on trend TFP growth (Guénette and Shao, forthcoming). Meanwhile, TLI growth has been revised down to reflect weaker population estimates in the 2020 census. However, the negative impact of this revision on potential GDP is fully offset over the projection horizon by upward revisions to capital deepening. These positive revisions are linked to the policy-led reallocation of public and private investments from the ailing real estate sector to more productive industrial sectors (e.g., supply chains for electric vehicles).
Chart 5: China’s potential output growth is projected to moderate further due to the declining contribution from capital deepening
Box 2: Risks to China’s total factor productivity growth
Box 2: Risks to China’s total factor productivity growth
China’s growth prospects are highly uncertain, and much will depend on the evolution of total factor productivity (TFP) growth.10 Because of this, in addition to the base case, we evaluate two possible alternative scenarios for trend TFP growth in China around our base case (Chart 2-A). The first is an upside risk scenario, where policy improvements stop the decline in TFP growth. The second is a downside risk scenario, in which downward pressures on productivity intensify. To evaluate these scenarios, we leverage parts of the growth accounting framework that Bailliu et al. (2016) use for China.11
- In the upside risk scenario, we assume that although policy and geopolitical tensions may present some headwinds in the short term, catch-up dynamics will sustain TFP growth. Specifically, gains from increasing investments in more productive sectors and spending on research and development (R&D) will drive these catch-up dynamics in the short term, while receding headwinds from policy uncertainty will allow for a pickup in productivity in the longer term. In this scenario, TFP growth increases to 2.3% in 2030 (Chart 2-A, yellow line). As a result, this raises potential growth to 3.7% (Chart 2-B, yellow line).
- In the downside risk scenario, we assume that technological diffusion from inflows of foreign direct investment is totally diminished and that R&D expenditures are ineffective in raising TFP growth, resulting in the evaporation of endogenous productivity gains.12 The remaining sources of productivity growth stem from reallocation of labour among sectors and human capital accumulation.13 TFP growth falls to 1.4% (Chart 2-A, green line) by 2030, with potential growth declining to 2.8% (Chart 2-B, green line).
Chart 2-A: The outlook for trend TFP growth in China is subject to upside and downside risks
Chart 2-B: The outlook for potential growth in China partly depends on TFP growth prospects
Oil-importing emerging-market economies
After its pandemic-induced collapse in 2020, potential output growth in oil-importing EMEs is expected to continue its gradual recovery through 2025, supported by further improvements to capital deepening and TLI (Chart 6). Investment is expected to strengthen as domestic monetary conditions ease and some of these EMEs benefit from advanced economies diversifying their supply chains away from China.14 TLI growth is also expected to rise further in 2024 and remain strong, buoyed by modest but steady improvement in labour force participation. Meanwhile, trend TFP growth is expected to stabilize around 1.4% per year as this grouping benefits from incremental participation in global value chains, investments in digitalization and some progress in implementing structural reforms. Overall, potential output growth is expected to average 4.1% per year over 2024–27.
Compared with the April 2023 assessment, potential output growth for oil-importing EMEs is revised up modestly over 2023–26, reflecting stronger trend TLI growth and capital accumulation.15 Higher TLI growth reflects a modest upgrade to our projections for trend labour force participation, consistent with the surprising resilience of labour markets in EMEs in recent years.16 Capital accumulation has been increased, partly due to a higher level of investment in India and stronger investment growth prospects for several economies in Asia.
Chart 6: Potential output growth of emerging-market economies is expected to recover gradually
Other regions
In Japan, potential output growth is expected to remain roughly stable around 0.7% per year over the projection, as modest improvements in capital deepening offset a worsening decline in TLI. While the participation rate is expected to continue rising, population aging will increasingly put downward pressure on TLI. Relative to the April 2023 assessment, potential output growth is revised down slightly over the projection due to weaker TLI growth, mostly reflecting a steepening decline in average hours worked.
Potential output growth in the rest-of-the-world grouping is expected to recover and average 2.0% over 2024–27, aided by the rapid accumulation of capital and the dissipation of pandemic-related downward pressures on trend TFP growth. Compared with last year’s assessment, potential output growth is revised up by 0.6 pps in 2023 and 0.3 pps per year, on average, over 2024–26. The upward revision mostly reflects stronger capital accumulation, particularly in Saudi Arabia’s non-oil sectors.17
Uncertainties around the outlook for global potential GDP
This year’s assessment is subject to a wide range of uncertainties.
On the downside, global uncertainties include the persistence of geopolitical tensions in Europe, Asia and the Middle East. These tensions are associated with risks related to geo-economic fragmentation as major economies seek to simplify their supply chains and increase strategic autonomy. Several regions—the United States in particular—face uncertainty around future immigration policies and the evolution of labour force participation. Meanwhile, tight global monetary conditions could exacerbate sovereign debt risks across many EMEs, resulting in increased economic uncertainty and reduced investment.
On the upside, the rapid adoption of new digital technologies—particularly the emergence of flexible artificial intelligence tools—could spur business investment, raise trend TFP growth and fuel faster catch-up growth in EMEs. Moreover, expanded opportunities for remote work may facilitate the reallocation of labour toward more productive sectors. Lastly, the more rapid implementation of structural reforms could sustainably raise potential growth in EMEs, in part by encouraging a faster pace of technological adoption.
References
Ahmed, S., A. Avshalumov, T. Chaar, E. Ekanayake, H. Lao, L. Poirier, J. Rolland-Mills, A. Toktamyssov and L. Xaing. 2023. “Assessing Global Potential Output Growth and the US Neutral Rate: April 2023.” Bank of Canada Staff Analytical Note No. 2023-5.
Aiyar, S., C. Ebeke and X. Shao. 2016. “The Impact of the Workforce Aging on European Productivity.” International Monetary Fund Working Paper No. 2016/238.
Aksoy, Y., H. S. Basso, R. P. Smith and T. Grasl. 2019. “Demographic Structure and Macroeconomic Trends.” American Economic Journal: Macroeconomics 11 (1): 193–222.
Bailliu, J., M. Kruger, A. Toktamyssov and W. Welbourn. 2016. "How Fast Can China Grow? The Middle Kingdom’s Prospects to 2030.” Bank of Canada Staff Working Paper No. 2016-15.
Baur, L. and S. Y. Wang. 2023. “Prime-Age Women Are Going Above and Beyond in the Labor Market Recovery.” Brookings Research.
Congressional Budget Office. 2024a. “The Budget and Economic Outlook: 2024 to 2034.”
Congressional Budget Office. 2024b. “The Demographic Outlook: 2024 to 2054.”
Fang, H. 2023. “Where is China’s Economy Headed?” Aspen Economic Strategy Group, Aspen Institute.
Favero, C. and V. Galasso. 2015. “Demographics and the Secular Stagnation Hypothesis in Europe.” CEPR Discussion Paper DP10887.
Feyrer, J. 2007. "Demographics and Productivity." Review of Economics and Statistics 89 (1): 100–109.
Guénette, J.-D. and L. Shao. Forthcoming. “Assessing the Impact of Demographic Composition on Productivity.” Bank of Canada Staff Discussion Paper.
International Monetary Fund (IMF). 2023. “World Economic Outlook: Navigating Global Divergences.”
International Labour Organization (ILO). 2024. “World Employment and Social Outlook.”
Lee, H., J. Lee and H. Kim. 2011. “Foreign Direct Investment, Technology Diffusion, and Host Country Productivity Growth.” Asian Development Bank, ADB Economics Working Paper Series No. 272.
Ohnsorge, F. L. and L. Quaglietti. 2023. “Trade as an Engine of Growth: Sputtering but Fixable.” World Bank Policy Research Working Paper No. WPS10356.
World Bank. 2020. “World Development Report 2020: Trading for Development in the Age of Global Value Chains.”
Appendix: Methodology for estimating potential output
We estimate potential output growth for every region using a growth accounting framework centred on a Cobb–Douglas aggregate production function. This framework assumes the following relationship between a country’s aggregate output and each factor of production (where \(\displaystyle\, \%\Delta x \)denotes the percentage change in variable \(\displaystyle\, x\)):
\(\displaystyle\, \%\Delta Y_{t} \) \(\displaystyle=\, \alpha \%\Delta \left(\frac{K_t} {L_t}\right) \) \(\displaystyle+\, \%\Delta L_{t} \) \(\displaystyle+\, \%\Delta TFP_t \) \(\displaystyle,\)
where \(\displaystyle\, Y\) is real gross domestic product (GDP), \(\displaystyle\, \frac{K} {L} \)is real capital stock per worker, \(\displaystyle\, L\) is labour input, \(\displaystyle\, TFP\) is total factor productivity, and \(\displaystyle\, \alpha\) is the share of capital income in output.
Country-level capital stocks are constructed using the perpetual inventory method (PIM) based on either national accounts data on gross fixed capital formation or on detailed asset-level investment data, as well as data on average depreciation rates and prices of various asset types.18 Potential is evaluated based on actual capital stocks because these determine the limits on an economy’s productive capacity today. Labour input—the total number of hours worked in the economy—is the product of average hours worked per person employed, the working-age population, the labour force participation rate and 1 minus the unemployment rate. Finally, TFP growth is calculated as the Solow residual in equation (1) using national accounts data on real GDP growth. Thus, TFP growth captures contributions to productivity from many factors, including global improvements in technology, efficiency gains resulting from domestic innovation, structural reforms, terms-of-trade shocks, financial and geopolitical crises and human capital accumulation.19
To abstract from the business cycle, trend levels of labour input and TFP are used to construct potential GDP growth as the sum of the respective input contributions according to the decomposition in equation (1). This notion of potential output coincides with production at full capacity—that is, the level consistent with full employment and long-run TFP.
Endnotes
- 1. Potential output growth is estimated using a growth accounting framework that decomposes potential output into trend total factor productivity, capital deepening and trend labour input. See the Appendix for more details.[←]
- 2. Population aging has been associated with weaker trend growth and productivity (Favero and Galasso 2015; Aiyar, Ebeke and Shao 2016; Aksoy et al. 2019). However, Feyrer (2007) suggests that certain age groups—notably the 40–49 cohort—contribute disproportionately to the level of productivity. Using UN population projections and updated estimates of Feyrer’s work, Guénette and Shao (forthcoming) find that favourable shifts in the age composition of the workforce could support an improvement in trend labour productivity growth in the United States, Canada and several major EMEs toward the end of the decade.[←]
- 3. This excludes the historical level difference up to 2022, which was mainly driven by comprehensive revisions to the national accounts in September 2023, and the adoption of higher population growth over the pandemic in line with the CBO population data.[←]
- 4. The stronger profile for net immigration is from the Congressional Budget Office (2024a).[←]
- 5. Weakness in the LFPR of cohorts aged 55 and older provided a partial offset. These cohorts have continued to leave the labour force since the start of the pandemic, with their LFPR falling from 40.2% in 2019 to 38.6% in 2023. We expect their LFPR to remain lower over the projection compared with pre-pandemic levels.[←]
- 6. Baur and Wang (2023) find that prime-working-age women have contributed the most to the rebound in LFPR since the pandemic. This is because teleworking, which has become more pervasive since then, has enabled women with caregiving responsibilities to remain attached to the labour force.[←]
- 7. We estimate this impact to be about 0.04 pps on trend TFP growth by 2027. Further, the Congressional Budget Office (2024a) expects that 2% of new immigrants are highly skilled workers employed in the science, technology, engineering and mathematics sectors and contribute to innovation.[←]
- 8. To estimate trend population, we apply a Hodrick–Prescott filter to historical and projection data on the civilian, non-institutional population aged 16 and older. We use the forecast growth rates from the Congressional Budget Office (2024b) over the projection. [←]
- 9. See Box 2 in Ahmed et al. (2023) for an overview of how domestic energy prices affect the level of TFP in the euro area.[←]
- 10. For more discussion on the wide-ranging prospects for China’s growth, see Fang (2023).[←]
- 11. Bailliu et al. (2016) describe the underlying relationships between foreign direct investment (FDI), research and development (R&D) expenditure and TFP used in our scenarios. They find that a 1% increase in real FDI stock is associated with an increase in TFP growth of 0.02 pps, and a 1% increase in R&D expenditures is associated with an increase in TFP growth of 0.7 pps.[←]
- 12. In our scenarios, changes in FDI inflows are not assumed to affect capital deepening because they represent a very small share of business investment (2.5% of gross fixed capital formation in 2022). However, FDI inflows are expected to have a disproportionate impact on trend TFP growth via several channels, including competitiveness between foreign and domestic firms and imitation of more productive foreign firms (see, for instance, Lee, Lee and Kim 2011).[←]
- 13. Growth in real FDI stock and R&D expenditures are assumed to be 0% over the projection horizon in this scenario.[←]
- 14. For example, the World Bank (2020) finds that global value chains can continue to boost growth, create better jobs and reduce poverty, provided that developing countries implement deeper reforms and industrialized countries pursue open, inclusive and predictable policies. That said, the prospects for diversification will likely be limited by high trade costs, which include transportation costs, non-tariff barriers and regulatory costs (Ohnsorge and Quaglietti 2023).[←]
- 15. Potential output growth is revised down sharply in 2020 due to an upward revision to the estimate of the scarring incurred during the COVID-19 pandemic.[←]
- 16. The International Labour Organization’s (ILO) near-term labour market projections for EMEs have been revised up in recent years, suggesting greater resilience and a modest reversal of pandemic-era scarring. Moreover, we expect the continued implementation of structural reforms in major EMEs such as India to support a gradual improvement in participation rates. Nevertheless, the ILO suggests that risks to labour force participation rates in EMEs are tilted to the downside (ILO 2024).[←]
- 17. In Saudi Arabia, which accounts for about 21% of the rest-of-the-world grouping, growth in non-oil private investment surged to 32.2% in 2022. Much of this surge reflects strong private investment in Saudi Arabia’s giga-projects, including large-scale infrastructure projects.[←]
- 18. Where national accounts investment data are used, geometric depreciation rates for the total capital stock are calculated as the weighted average of depreciation rates across underlying asset classes.[←]
- 19. For those regions in which human capital is estimated separately from the Solow residual, including China, oil-importing emerging-market economies and the rest-of-the-world grouping, the reported potential TFP estimates include contributions from human capital accumulation.[←]
Acknowledgements
We thank Harriet Jackson, José Dorich, Subrata Sarkar, Michael Francis and Fotios Raptis for their useful comments and suggestions. In addition, we thank Meredith Fraser-Ohman, Jordan Press and Carole Hubbard for excellent editorial assistance and Patricia Marando and Laurent Lavallée for their help translating this note into French.
Disclaimer
Bank of Canada staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context, produced independently from the Bank’s Governing Council. This work may support or challenge prevailing policy orthodoxy. Therefore, the views expressed in this note are solely those of the authors and may differ from official Bank of Canada views. No responsibility for them should be attributed to the Bank.
DOI: https://doi.org/10.34989/san-2024-10