David Longworth served as a Deputy Governor of the Bank of Canada from April 2003 until his retirement from the Bank in March 2010. As a member of the Bank’s Governing Council, he shared responsibility for decisions with respect to monetary policy and financial system stability, and for setting the strategic direction of the Bank.
Mr. Longworth joined the Bank of Canada in 1974 in the Special Studies Division of the Research Department. In 1984, he was appointed Assistant Chief of the Special Studies and Balance of Payments divisions in the International Department and was named Deputy Chief of the department the following year. In 1987, Mr. Longworth moved to the Department of Monetary and Financial Analysis to become Research Adviser and later, Chief. He was appointed Chief of the Research Department in 1996 and Adviser to the Governor in 2000.
Born in Edmonton, Alberta, Mr. Longworth received a bachelor of science degree in mathematical statistics in 1973 and a master’s degree in economics in 1974, both from the University of Alberta. He also studied at the Massachusetts Institute of Technology, where he graduated with a PhD in economics in 1979.
February 17, 2010
Thank you for inviting me here today. It is a pleasure to be with you. This afternoon, I would like to talk about liquidity and the role of the Bank of Canada.
September 23, 2009
The Bank's mandate is to promote Canada's economic and financial well-being. Clearly, this is an important mandate, and we are determined to demonstrate excellence as we work to fulfill it.
March 12, 2009
With your professional interests in foreign exchange, money markets, capital markets, and derivatives, I'm sure the past year and a half has been exciting and interesting – if those are the right words. We've been living through a period of astonishing financial turbulence, historic marketplace losses, and serious threats to financial stability.
August 26, 2008
The financial turbulence over the past year has been costly and difficult for many individuals and financial institutions; it's been challenging for policy-makers; and it's had implications for the overall economy.
April 10, 2008
Today, I'd like to discuss some of the crucial issues that we have been dealing with during this period. I'll begin with a brief overview of some key events that have led to the turbulence that continues to upset financial markets and that greatly contributed to the remarkably wide credit spreads that we now witness.
October 3, 2007
Sound financial investment is important to individuals, to firms, and to society as a whole. By definition, investment is forward looking, and thus our future financial well-being is shaped by the soundness of the investment decisions we make today.
February 6, 2007
The strengths of the twin cities - in research, advanced manufacturing, and information technology, among other sectors - are well known. Less well known, perhaps, is the region's success in responding effectively to changes in the world economy.
November 8, 2006
The hedge fund industry has been growing so quickly that meetings like this one are welcome—they provide a chance to step back and look at context and trends. And that's what I propose to do this morning. Specifically, I'd like to speak about volatility in both the real economy and in financial markets and discuss how it has been affected by monetary policy and financial innovation.
May 5, 2006
Many analysts have examined the relationship between the financial system and economic development. They have uncovered some interesting facts regarding the characteristics of the financial system - characteristics that contribute to the best possible allocation of savings to productive investments, which are themselves engines of economic growth.
Staff Working Papers
This paper compares the empirical performance of Canadian weighted monetary aggregates (in particular, Fisher ideal aggregates) with the current summation aggregates, for their information content and forecasting performance in terms of prices, real output and nominal spending for the period 1971Q1 to 1989Q3. The properties of money-demand equations for these aggregates, particularly their temporal stability, […]
With the demise of monetary targeting over the past 20 years in many major countries, the question has arisen as to whether central banks should look at money at all when formulating and conducting monetary policy.
This study examines different aspects of the international integration of capital markets. In particular, it attempts to determine whether the changes in controls and regulatory policies that have occurred in the past decade have been associated with a greater degree of market integration.
In this paper, the simulation properties of a small, dynamic, open-economy IS-LM-Aggregate Supply model are examined under a variety of alternative policy rule assumptions. These assumptions include rigid money stock, exchange rate and nominal income targets, as well as less rigid policy rules that recognize information limitations. The model that is used consists of four […]
Bank of Canada Review articles
November 20, 2004
Remarks by David Longworth, Deputy Governor of the Bank of Canada to the Canadian Association for Business Economics
May 22, 2003
Inflation targeting, a stable macroeconomic environment, and an average growth rate for potential output that is not expected to vary much in the next several years all help households, businesses, and governments in their medium-term economic and financial planning. Several simple rules of thumb can be usefully employed in this planning. Specifically, inflation targeting has maintained most major measures of inflation quite close to the target midpoint on average over a number of years. Combined with a clear fiscal framework, this has contributed to a more stable macroeconomic environment in which output varies less around its potential level. Potential output growth is expected to average around 3 per cent over the next several years.
In light of these factors and historical relationships, labour income, profits, and consumer spending will likely grow, on average, by about 5 per cent over the medium term. Real and nominal long-term interest rates should also continue to be stable, with real 30-year yields varying around 3.5 or 4.0 per cent, and nominal yields varying around 5.5 or 6.0 per cent.
August 21, 2002
Central banks must cope with considerable uncertainty about what will happen in the economy when formulating monetary policy. This article describes the different types of uncertainty that arise and looks at examples of uncertainty that the Bank has recently encountered. It then reviews the strategies employed by the Bank to deal with this problem.
The other articles in this special issue focus on three of these major strategies.
May 21, 2002
Over the last 10 years, the level of inflation has been much lower than in the previous two decades. At the same time, the behaviour of inflation has changed profoundly.
By surveying the data and the economic research, the author first examines changes in the variability, growth rates, and behaviour of some of the major macroeconomic variables during the 1980s and 1990s. He then looks at how these changes are linked to a shift in the approach of monetary policy over the period. Lastly, he reviews the economic benefits that these changes have had for Canada.