José Dorich is a Senior Policy Director in the International Economic Analysis Department (INT). In this capacity, he is a member of the Bank’s senior management team. He has responsibility for overseeing INT’s model development activities and providing leadership on the analysis of the global economy.
Mr. Dorich joined the Bank in 2008 as a Senior Analyst in the Canadian Economic Analysis Department (CEA). Since then, he has held increasingly senior positions. In 2014, he became Director of the Model Development Division in CEA. In this role, he led, coordinated and conducted research supporting the 2016 renewal of the inflation-control agreement. He also led the team responsible for the development of ToTEM III, the most recent version of the Bank’s main structural macroeconomic model.
Throughout his career, Mr. Dorich has accumulated significant knowledge and expertise in model development and monetary policy analysis. His primary research interests include macroeconomic theory, monetary economics and applied macroeconomics. Specific topics include inflation dynamics, the neutral rate of interest, unconventional monetary policies and monetary framework issues.
Born in Lima, Perú, Mr. Dorich holds a PhD in Economics from Universitat Pompeu Fabra.
Staff Analytical Notes
This note provides an update on Bank of Canada staff’s assessment of the Canadian neutral rate. The neutral rate is the policy rate needed to keep output at its potential level and inflation at target once the effects of any cyclical shocks have dissipated. This medium- to long-run concept serves as a benchmark for gauging the degree of monetary stimulus provided by a given policy setting.
We use the Terms-of-Trade Economic Model (ToTEM) to conduct demand- and supply-driven simulations, both of which deliver weakness in Canadian non-commodity exports relative to foreign activity in line with recent data.
This note summarizes the key findings from Bank of Canada staff analytical work examining the reasons for the recent weakness in Canadian non-energy exports. Canada steadily lost market share in US non-energy imports between 2002 and 2017, mostly reflecting continued and broad-based competitiveness losses.
The neutral nominal policy rate serves as a benchmark for assessing the degree of monetary stimulus and provides a medium- to long-run anchor for the policy rate. Since quantitative measures of the neutral rate are subject to considerable uncertainty, Bank staff rely on four different approaches to estimate the Canadian neutral rate.
Staff Working Papers
Recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent. We evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the Canadian economy.
I present a structural econometric analysis supporting the hypothesis that money is still relevant for shaping inflation and output dynamics in the United States. In particular, I find that real money balance effects are quantitatively important, although smaller than they used to be in the early postwar period.
This report provides a detailed technical description of an updated version of the Terms-of-Trade Economic Model (ToTEM II), which replaced ToTEM (Murchison and Rennison 2006) in June 2011 as the Bank of Canada’s quarterly projection model for Canada.
Bank of Canada Review Article
November 16, 2017
The neutral rate serves as a benchmark for measuring monetary stimulus and provides a medium- to long-run anchor for the real policy rate. Global neutral rate estimates have been falling over the past few decades. Factors such as population aging, high corporate savings, and low trend productivity growth are likely to continue supporting a low global neutral rate. These global factors as well as domestic factors are exerting downward pres-sure on the Canadian real neutral rate, which is estimated to be between 0.5 to 1.5 per cent. This low neutral rate has important implications for monetary policy and financial stability.
August 18, 2011
This article describes changes to the structure of ToTEM—the Bank of Canada’s main model for projection and policy analysis—that allow an independent role for long-term interest rates, as well as for the risk spreads that lead to differences in the interest rates faced by households, firms and the government. These changes broaden the range of policy questions that the model can address and improve its ability to explain data. The authors use the model to simulate the effects of shocks to the risk spreads on interest rates similar to those that occurred during the recent financial crisis. They also use the model to assess the macroeconomic impact of higher requirements for bank capital and liquidity.
The Economy, Plain and Simple
January 31, 2019
Ever wonder how your wages are determined? You’re not the only one who cares about your wages. At the Bank of Canada, we care about them a lot too.
- “Price Level Targeting, the Zero Lower Bound on the Nominal Interest Rate and Imperfect Credibility”
(with Gino Cateau)
- “Imperfect Asset Substitution in a Small Open Economy Model”
(with Rhys Mendes and Yang Zhang)
- “Forward-Looking versus Backward-Looking Behavior in Inflation Dynamics: a New Test”
- “The Welfare Losses of Price Rigidities”