The authors use the Bank of Canada's version of the Global Economy Model, a multi-country, multi-sector dynamic stochastic general-equilibrium model with an active banking system (the BoC-GEM-FIN), to study the evolution of global current account balances following the recent global financial crisis.
The forecast of world economic growth plays a key role in the conduct of Canadian monetary policy. In this context, the authors study the usefulness of the monthly Purchasing Managers’ Indexes (PMIs) in predicting short-term real GDP growth in the euro area, Japan, the United Kingdom, and China, as well as in the world economy.
The survey results point to an overall easing in business-lending conditions during the first quarter of 2010, following a stabilization of lending conditions in the last quarter of 2009. Both the price and non-price aspects of business lending eased during the first quarter.
On balance, firms expect sales growth to pick up over the next 12 months, and plan to increase investment spending and employment. Their investment plans are increasingly being targeted at expansion and at improving efficiency to promote
future growth.
In accordance with the schedule of term purchase and resale agreement (PRA) auctions announced on 19 January (see schedule), the Bank of Canada announced today that it will conduct a term PRA operation.
The Department of Finance and the Bank of Canada are seeking the views of government securities distributors, institutional investors, and other interested parties on issues relating to the management of the cash flow profile of Government of Canada securities over the medium term, and demand for long term bonds (nominal and Real Return).