F - International Economics

• May 14, 2015

  Inflation Dynamics in the Post-Crisis Period

  Bank of Canada Review - Spring 2015 Christian Friedrich, Marc-André Gosselin

  Inflation rates in advanced economies experienced two consecutive puzzles during the period following the global financial crisis—unexpectedly high inflation from the end of 2009 to 2011 and unexpectedly low inflation from 2012 to the middle of 2014. We investigate these developments in two ways. First, we show that accounting for inflation expectations by households explains a significant share of the inflation puzzles at the international level. Second, we find that, for Canada, elevated competition in the retail sector is also important for understanding inflation dynamics in the post-crisis period.

  Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E3, E31, E5, F, F4, F41
• May 14, 2015

  The Slowdown in Global Trade

  Bank of Canada Review - Spring 2015 Michael Francis, Louis Morel

  Global trade growth has been weak during the period following the 2007–09 financial crisis. This is an important development for Canada, given the Canadian economy's high degree of openness to trade. This article investigates some of the factors behind the slowdown in global trade and finds that the weakness of global demand and its changing composition, increased protectionism and diminishing incentives to expand trade have all played a role. Some of these factors are likely to have only a temporary effect on trade growth, but others could be more long-lasting.

  Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): F, F1, F4, F6