Jean-Philippe Cayen was appointed Senior Policy Advisor in the International Economic Analysis Department in December 2018. In this capacity, he is part of the leadership team that guides and manages the work of the department. He leads the department’s contribution to the Bank’s Monetary Policy Report and conducts analysis and research on current issues affecting the international economy. His primary interests include economic forecasting and business cycle analysis.
Mr. Cayen started his career at the Bank in 2000 as an economist in the Monetary and Financial Analysis Department. He has held several positions at the Bank over the years, including Assistant Chief of the United States Division and Director of the Projection Division in the Canadian Economic Analysis Department. He holds a master's degree in applied economics from HEC Montréal.
This note presents the updated estimates of potential output growth for the global economy through 2021. Global potential output is expected to grow by 3.3 per cent per year over the projection horizon.
We use a novel approach to identify economic developments that drive exchange rates in the long run. Using a panel of six quarterly U.S. bilateral real exchange rates – Australia, Canada, the euro, Japan, New Zealand and the United Kingdom – over the 1980-2007 period, a dynamic factor model points to two common factors.
The workhorse DSGE model used for monetary policy evaluation is designed to capture business cycle fluctuations in an optimization-based format. It is commonplace to log-linearize models and express them with variables in deviation-from-steady-state format.