Césaire Meh was appointed Senior Research Officer of Economic and Financial Research, effective November 1, 2017. In this capacity, he provides intellectual leadership to Bank-wide research, especially on issues related to the nexus between monetary policy and financial stability and to macroprudential policies. He has published extensively in peer-refereed journals and was recently a Visiting Research Scholar at Princeton University.

Most recently, Mr. Meh was the Managing Director of the International Economic Analysis Department. There, he was responsible for the management and strategic direction of the department, for providing policy advice and analysis on global economic and financial developments, and for participating in various international policy forums such as the G20, G7 and International Monetary Fund. He has represented the Bank in the G20 Framework Working Group, the Macroprudential Supervision Group of the Basel Committee on Banking Supervision (BCBS) and the Macroeconomic Assessment Group of the Financial Stability Board. For the latter, he led the production of the Bank of Canada report, Strengthening International Capital and Liquidity Standards: A Macroeconomic Impact Assessment for Canada. He also chaired the workstream on the implementation of the Basel III countercyclical capital buffer.

Mr. Meh joined the Bank in 2001 as an economist in the former Monetary and Financial Analysis Department (MFA). He increasingly assumed greater responsibilities in his roles as Principal Researcher, Assistant Director of the monetary financial modelling division in MFA, Senior Research Director in the Canadian Economic Analysis Department and Senior Policy Director in the Financial Stability Department (FSD). He was then named the Deputy Managing Director of FSD, where he assisted the Managing Director in the management of the department and oversaw FSD’s contributions to the Bank’s semi-annual Financial System Review and the work on bail-ins of large Canadian banks, as well as its support for the Bank in its role as lender of last resort.

Mr. Meh’s research has focused on bank capital in macroeconomic models, the nexus between financial stability and monetary policy; the design of macroprudential policies; the distributional consequences of monetary policy; the mix between monetary, fiscal and macroprudential policies; and, more recently, fintech.

Born in Yamoussoukro, Ivory Coast, Mr. Meh holds a PhD in economics from Western University and a master’s degree in economics from Université Laval.


September 8, 2018

Investing in Monetary Policy Independence in a Small Open Economy

Remarks Stephen S. Poloz, Césaire Meh Monetary Policy Spillovers in a Financially Integrated World Copenhagen, Denmark
Governor Poloz discusses policies that can help central banks keep the ability to pursue independent monetary policy in a financially integrated global economy.

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Staff discussion papers

Household Debt, Assets, and Income in Canada: A Microdata Study

Staff Discussion Paper 2009-7 Césaire Meh, Yaz Terajima, David Xiao Chen, Thomas J. Carter
The authors use microdata from the 1999 and 2005 Surveys of Financial Security to identify changes in household debt, and discuss their potential implications for monetary policy and financial stability. They document an increase in the debt-income ratio, which rose from 0.75 to 0.95, on average.

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Staff working papers

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.

Monetary Policy, Trends in Real Interest Rates and Depressed Demand

Staff Working Paper 2021-27 Paul Beaudry, Césaire Meh
Over the last few decades, real interest rates have trended downward. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors. We explore the claim that these trends may have been amplified by certain features of monetary policy.

The Welfare Cost of Inflation Revisited: The Role of Financial Innovation and Household Heterogeneity

We document that, across households, the money consumption ratio increases with age and decreases with consumption, and that there has been a large increase in the money consumption ratio during the recent era of very low interest rates. We construct an overlapping generations (OLG) model of money holdings for transaction purposes subject to age (older households use more money), cohort (younger generations are exposed to better transaction technology), and time effects (nominal interest rates affect money holdings).
Content Type(s): Staff research, Staff working papers Topic(s): Inflation: costs and benefits JEL Code(s): E, E2, E21, E4, E41

Housing Market Dynamics and Macroprudential Policy

Staff Working Paper 2016-31 Gabriel Bruneau, Ian Christensen, Césaire Meh
We perform an analysis to determine how well the introduction of a countercyclical loanto- value (LTV) ratio can reduce household indebtedness and housing price fluctuations compared with a monetary policy rule augmented with house price inflation.

Effects of Funding Portfolios on the Credit Supply of Canadian Banks

Staff Working Paper 2015-10 H. Evren Damar, Césaire Meh, Yaz Terajima
This paper studies how banks simultaneously manage the two sides of their balance sheet and its implications for bank risk taking and real economic activity. First, we analyze how changes in funding affect the supply of bank loans.

A Policy Model to Analyze Macroprudential Regulations and Monetary Policy

Staff Working Paper 2014-6 Sami Alpanda, Gino Cateau, Césaire Meh
We construct a small-open-economy, New Keynesian dynamic stochastic general-equilibrium model with real-financial linkages to analyze the effects of financial shocks and macroprudential policies on the Canadian economy. Our model has four key features.

Macroprudential Rules and Monetary Policy when Financial Frictions Matter

Staff Working Paper 2012-6 Jeannine Bailliu, Césaire Meh, Yahong Zhang
This paper examines the interaction between monetary policy and macroprudential policy and whether policy makers should respond to financial imbalances. To address this issue, we build a dynamic general equilibrium model that features financial market frictions and financial shocks as well as standard macroeconomic shocks.

Bank Leverage Regulation and Macroeconomic Dynamics

Staff Working Paper 2011-32 Ian Christensen, Césaire Meh, Kevin Moran
This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy.

Leverage, Balance Sheet Size and Wholesale Funding

Staff Working Paper 2010-39 H. Evren Damar, Césaire Meh, Yaz Terajima
Some evidence points to the procyclicality of leverage among financial institutions leading to aggregate volatility. This procyclicality occurs when financial institutions finance their assets with non-equity funding (i.e., debt financed asset expansions). Wholesale funding is an important source of market-based funding that allows some institutions to quickly adjust their leverage.

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Bank publications

Bank of Canada Review articles

February 23, 2012

Household Borrowing and Spending in Canada

Understanding how much of the increased debt load of Canadian households has been used to finance household spending on consumption and home renovation is important for the conduct of monetary policy. In this article, the authors use a comprehensive data set that provides information on the uses of debt by Canadian households. They first present some facts regarding the evolution of Canadian household debt over the period from 1999 to 2010, emphasizing the increased importance of debt flows that are secured by housing. They then explore how Canadian households have used their borrowed funds over the same period, and assess the role of these borrowed funds in financing total consumption and spending on home renovation. Finally, they examine the possible effects of a decline in house prices on consumption when housing equity is used as collateral against household indebtedness.
August 18, 2011

Bank Balance Sheets, Deleveraging and the Transmission Mechanism

The author investigates the influence of bank capital on economic activity, using a macroeconomic model that incorporates an explicit role for financial intermediation. The analysis focuses on the role of a “bank-capital channel” in propagating and amplifying monetary policy actions and other shocks. The question of whether weaker bank balance sheets make the economy more vulnerable to adverse shocks is examined, together with the impact of initiatives, such as countercyclical capital buffers, on the transmission of monetary policy and other shocks to the real economy.
August 19, 2010

Should Monetary Policy Be Used to Counteract Financial Imbalances?

The authors examine whether monetary policy should and could do more to lean against financial imbalances (such as those associated with asset-price bubbles or unsustainable credit expansion) as they are building up, or whether its role should be limited to cleaning up the economic consequences as the imbalances unwind.
April 7, 2009

Price-Level Uncertainty, Price-Level Targeting, and Nominal Debt Contracts

Many central banks around the world have embraced inflation targeting as a monetary policy framework. Interest is growing, however, in price-level targeting as an alternative. The choice of frameworks has important consequences for financial contracts, most of which are not fully indexed to the price level. Changes in the price level therefore lead to changes in the real value of contracts.
April 5, 2009

Unexpected Inflation and Redistribution of Wealth in Canada

One of the most important arguments in favour of price stability is that unexpected inflation generates changes in the distribution of income and wealth among different economic agents. These redistributions occur because many loans are specified in fixed dollar terms and unexpected inflation redistributes wealth from creditors to debtors by reducing the real value of nominal assets and liabilities.
September 15, 2008

Productivity in Canada: Does Firm Size Matter?

The research findings highlighted in this article suggest that firm-size differences play a significant role in explaining the productivity gap between Canada and the United States. The authors review factors that lead to a positive relationship between productivity and size and then look at Canadian evidence of this relationship at the firm level. They quantify the extent to which the change in Canadian productivity as well as the Canada-U.S. productivity differences can be accounted for by the change in the importance of large firms and identify several factors that play a role in determining average firm size and aggregate productivity.
October 8, 2006

Modelling Financial Channels for Monetary Policy Analysis

The Bank of Canada considers a wide range of information and analysis before making a monetary policy decision and uses carefully articulated models to produce economic projections and to examine alternative scenarios. This article describes an ongoing research agenda at the Bank to develop models in which financial variables play an active role in the transmission of monetary policy actions to economic activity. Such models can help to analyze information from the financial side of the economy and to provide an overall view of the implications of financial developments for the current economic outlook. The authors also explain how this research can help address other issues relevant to the objectives of monetary policy, including how asset-price movements should be taken into account in the monetary policy framework.

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Financial System Review articles

June 11, 2015

Assessing Vulnerabilities in the Canadian Financial System

The authors present the four common cyclical vulnerabilities that appear in financial systems, providing examples of qualitative and quantitative indicators used to monitor these vulnerabilities across different sectors. They also discuss other inputs to the vulnerability assessment and to the internal process used at the Bank of Canada for identifying, evaluating and communicating vulnerabilities and risks, and highlight some of the key challenges in assessing financial system vulnerabilities and risks.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial stability JEL Code(s): G, G0, G01, G1, G10, G2, G20

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Journal publications

Refereed journals



Research in progress

  • “Historical Insights for the Sustainability of Canadian Government Debt,”
    (with James MacGee).
  • “Savings, Government Deficits, and Interest Rate Dynamics in a Covid-19 World,”
    (with Paul Beaudry).
  • “Financial Vulnerability and Inflation Targeting,”
    (with Don Coletti, Fernando Duarte, Bruno Feunou and Yang Zhang)
  • “FinTech, Mobile Money, and Financial Inclusion,”
    (with Markus Brunnermeier and Nicola Limodio).
  • “The Role of Automatic Fiscal Stabilizers in the Business Cycles of Small Open Economies,”
    (with James MacGee).
  • “Firm Size, Technology Adoption Costs and Aggregate Productivity,”
    (with Danny Leung and Yaz Terajima).