Lawrence L. Schembri

Deputy Governor



Lawrence L. Schembri was appointed Deputy Governor of the Bank of Canada in 2013, serving as one of two deputy governors responsible for overseeing the Bank’s analysis and activities to promote a stable and efficient financial system. In 2016, he became responsible for overseeing the Bank’s analysis of domestic economic developments. As a member of the Bank’s Governing Council, he shares responsibility for decisions with respect to monetary policy and financial system stability, and for setting the strategic direction of the Bank.

Born in Toronto, Ontario, Mr. Schembri received a Bachelor of Commerce degree from the University of Toronto in 1979, an MSc in Economics from the London School of Economics and Political Science in 1980, and a PhD in Economics from the Massachusetts Institute of Technology in 1985. After completing his PhD, Mr. Schembri was an assistant professor and, later, associate professor of economics at Carleton University until 2001.

Mr. Schembri joined the Bank in 1997 as a visiting Research Advisor in what is now the International Economic Analysis Department. In 2001, he was appointed Research Director in the same department and became Chief of the department in 2005. In 2010, he was appointed Advisor to the Governor, with responsibilities for financial stability analysis and coordinating the Bank’s contribution to the Financial Stability Board. His published research has focused on exchange rate and monetary theory and policy in open economies, the international monetary system and financial stability.

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Staff Discussion Papers

Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced Jurisdictions

Staff Discussion Paper 2020-7 Robert Amano, Thomas J. Carter, Lawrence L. Schembri
We summarize the review and renewal process at four central banks (Reserve Bank of New Zealand, Bank of England, Sveriges Riksbank and the US Federal Reserve Bank) and compare them with the process at the Bank of Canada, which has been well-established since 2001.

Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada

Staff Discussion Paper 2018-18 Thomas J. Carter, Rhys R. Mendes, Lawrence L. Schembri
In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks.

External Stability, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market Economies

Staff Discussion Paper 2011-5 Olivier Gervais, Lawrence L. Schembri, Lena Suchanek
In emerging-market economies, real exchange rate adjustment is critical for maintaining a sustainable current account position and thereby for helping to reduce macroeconomic and financial instability.

Strengthening IMF Surveillance: An Assessment of Recent Reforms

Staff Discussion Paper 2009-10 Robert Lavigne, Lawrence L. Schembri
The authors assess the potential impact of recently approved reforms to International Monetary Fund (IMF) surveillance; namely, the "2007 Decision on Bilateral Surveillance Over Members' Policies" and the "Statement of Surveillance Priorities" (SSP). They conclude that these complementary reforms have the potential to create a comprehensive and coherent framework for IMF surveillance. If implemented properly, […]
Content Type(s): Staff research, Staff discussion papers Topic(s): International topics JEL Code(s): F, F3, F33

Canada and the IMF: Trailblazer or Prodigal Son?

Staff Discussion Paper 2009-1 Michael Bordo, Lawrence L. Schembri, Tamara Gomes
Canada played an important role in the postwar establishment of the International Monetary Fund (IMF), yet it was also the first major member to challenge the orthodoxy of the BrettonWoods par value system by abandoning it in 1950 in favour of a floating, market-determined exchange rate.

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Staff Working Papers

Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited

Staff Working Paper 2009-22 Ehsan U. Choudhri, Lawrence L. Schembri
The paper examines how the Balassa-Samuelson hypothesis is affected by a modern variation of the standard model that allows product differentiation (within the traded and nontraded goods sectors) with the number of firms determined exogenously or endogenously.
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Productivity JEL Code(s): F, F3, F31, F4, F41

Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy

Staff Working Paper 2007-45 Michael Bordo, Ali Dib, Lawrence L. Schembri
This paper revisits Canada's pioneering experience with floating exchange rate over the period 1950–1962. It examines whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open economy model of the Canadian economy.
Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Exchange rates JEL Code(s): E, E3, E32, E37, F, F3, F31, F32, N, N1

Multilateral Adjustment and Exchange Rate Dynamics: The Case of Three Commodity Currencies

In this paper, we empirically investigate whether multilateral adjustment to large U.S. external imbalances can help explain movements in the bilateral exchange rates of three commodity currencies – the Australian, Canadian and New Zealand (ACNZ) dollars.

Real Effects of Collapsing Exchange Rate Regimes: An Application to Mexico

Staff Working Paper 1999-10 Patrick Osakwe, Lawrence L. Schembri
This paper examines the impact of a collapsing exchange rate regime on output in an open economy in which shocks to capital flows and exports predominate. A sticky-price rational expectations model is used to compare the variability of output under the collapsing regime to that under alternative fixed and flexible regimes. Output is found to […]
Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates JEL Code(s): F, F3, F31, F4, F41

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Bank Publications

The Economy, Plain and Simple

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Journal Publications

Refereed journals

  • "Current Account Dynamics, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market Economies"
    (with Olivier Gervais and Lena Suchanek), Journal of Development Economics, Vol. 119, March 2016, p. 86-89.
  • "Building an Open, Integrated, and Resilient Global Financial System: The Road to Brisbane and Beyond"
    Canadian Public Policy, 2014, 40(4): p. 408-412.
  • "Housing Finance in Canada: Looking Back to Move Forward"
    National Institute Economic Review, 2014, 230: p. R45-R57.
  • "Productivity, Commodity Prices and the Real Exchange Rate: The Long-Run Behavior of the Canada-US Exchange Rate"
    (with Ehsan Choudhri), International Review of Economics and Finance, 2014, 29: p. 537-551.
  • “Multilateral adjustment, regime switching and real exchange rate dynamics”
    (with Ali Dib, Takashi Kano and Jeannine Bailliu) North American Journal of Economics and Finance, Vol. 27, January 2014, pages 68-87.
  • "Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited"
    (with Ehsan Choudhri), Review of International Economics, 2010, 18 (5) p.924-36
  • "Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy"
    (with Michael Bordo and Ali Dib), International Journal of Central Banking, 2010, 6 (3): p.51-99
  • "Canada and the IMF: Trailblazer or Prodigal Son?"
    (with Michael Bordo and Tamara Gomes), Open Economies Review, 2010, 21(2): p.309-33
  • "Exchange Rate Policy in Canada: Lessons from the Past: Implications for the Future"
    Current Politics and Economics of Europe, 2006, 17 (1): p.99-126 (Reprinted in A. Verdun (ed.) Britain and Canada and their Large Neighbouring Monetary Unions (Nova, 2006) p.77-98)
  • "Revisiting the Case for Flexible Exchange Rates in North America"
    (with John Murray and Pierre St-Amant), North American Journal of Economics and Finance, 2003, 14: p.207-240. (Reprinted in L. Michelis and M. Lovewell (eds) Exchange Rates, Economic Integration and the International Economy (APF Press, 2004), p.77-113).
  • "A Tale of Two Dollars: The Future of Canada's Currency"
    (with Robert Lafrance) Management Internationale, 2003, 8: p.53-64.
  • "Productivity Performance and International Competitiveness: An Old Test Reconsidered"
    (with Ehsan Choudhri) Canadian Journal of Economics, 2002, 35(2): p.341-62.
  • "Living Around the Bloc: Lessons from Canada for Small Countries"
    Journal of Public Policy, 2002, 22(2): p.119-142.
  • "The Real Effects of Collapsing Exchange Rate Regimes: An Application to Mexico,"
    (with Patrick Osakwe), Journal of International Economics, 2002, 57(2): p.299-325.
  • "Trade Liberalization and Sectoral Productivity Growth: Some Evidence for Canada and the United States,"
    (with Richard Brecher and Ehsan Choudhri) Journal of International Economics, 1996, 40: p.299-321.
  • "The Role of Canadian Banks in 19th Century U.S. Banking Crises,"
    (with Jennifer Hawkins) Business History, 1992, 34(3): p.122-52.
  • "The Construction of Establishment-Level Capital Stock Series,"
    (with Eugene Beaulieu), Journal of Economic and Social Measurement, 1990, 16: p.55-70.
  • "Atheoretical and Structural Approaches to Modelling Canadian-American Macroeconomic Interaction,"
    (with David Johnson) Empirical Economics, 1990, 15(4): p.367-82.
  • "Macroeconomic Stability and Policy Rules in a two sector model of an open economy,"
    Canadian Journal of Economics, 1988, 21(1): p.87-96.



  • “Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada” (with T. Carter and R. Mendes) in J. Simon and M. Sutton (eds.) Central Bank Frameworks: Evolution or Revolution? Reserve Bank of Australia conference proceedings.*
  • A discussion of “Is There Macroprudential Policy Without International Cooperation?” by S. Cecchetti and P. Tucker (with F. Ghironi) in the proceeding of the Federal Reserve Bank of San Francisco Asia Economic Policy Conference, Challenges in a Diverging Global Economy. 2018: 115-120.
  • "The Future of the IMS: The New ‘Holy Trinity’ of External, Monetary, and Financial Stability"
    (with Eric Santor) in M Uzan (ed.), Bretton Woods: The Next 70 Years (Reinventing Bretton Woods Committee, 2015) p. 335-342.
  • "A Tale of Two Countries and Two Booms – Canada and the United States in the 1920s and the 2000s: The Roles of Monetary and Financial Stability Policies"
    (with Ehsan Choudhri) in O. Humpage (ed.), Current Federal Reserve Policy Under the Lens of Economic History: Essays to Commemorate the Federal Reserve System's Centennial, (Cambridge, 2015) p. 267-295.
  • "Success Under Pressure: The Bank of Canada and the Global Financial Crisis – Actions and Lessons"
    (with Eric Santor), in R. Medhora and D. Rowlands (eds.), Crisis and Reform: Canada and the International Financial System (Centre for International Governance Innovation, 2014) p.103-118.
  • A discussion of « Terms of Trade Shocks and Fiscal Cycles »
    by Graciela Kaminsky (in R. Fry, C. Jones and C. Kent (eds.) Inflation in an Era of Relative Price Shocks (Reserve Bank of Australia, 2010) p.251-257
  • "The Case for Financial Liberalization"
    (with Eric Santor) in H. Bougrine and M. Seccareccia, (eds.), Introducing Macroeconomic Analysis: Issues, Questions, and Competing Views (Emond Montgomery Publications, 2010) p.271-282
  • "Macroeconomic Stability and Economic Resilience in Small States: The Role of Macroeconomic Policies"
    in L. Briguglio, G. Cordina, N. Farrugia and C. Vigilance (eds.) Small States and the Pillars of Economic Resilience (University of Malta and Commonwealth Secretariat, 2008), p. 37-58.
  • A discussion of « Monetary Policy in East Asia: Common Concerns »
    by Marvin Goodfriend, in Growth, Integration, and Monetary Policy in East Asia, (Bank of Japan, 2007), p. 226-232.
  • "External Adjustment and Debt Sustainability"
    (with Douglas Hostland) in R. Driver, P. Sinclair and C. Thoenissen (eds.), Exchanges Rates, Capital Flows and Policy, (Routledge, 2005) p. 261-300.
  • "Productivity and Trade in North America: A Sectoral Analysis"
    (with Mykyta Vesselovsky) in R. Harris (ed.), North American Linkages: Opportunities and Challenges for Canada, (Industry Canada & University of Calgary Press, 2004), p.89-116.
  • "International Financial Architecture Reform: Just Tinkering Around the Edges"
    (with Malcolm Knight and James Powell) in C. L. Gilbert, J. Rollo and D. Vines (eds.), The IMF and Its Critics: Reforming of the Global Financial Architecture, (Cambridge University Press, 2004), p. 124-157.
  • "Measuring the Barriers to Trade in Services: Literature and Methodologies"
    (with Zhiqi Chen) in J. Curtis and D Ciuriak (eds.) Trade Policy Research 2002, (Department of Foreign Affairs and International Trade Canada, 2002).
  • "Productivity Growth and International Competitiveness: The Experience of Canada and Implications for India,"
    (with Ehsan Choudhri) in Trade, Innovation and Industrial Performance. (Conference Board of Canada, 1997) p. 21-28.
  • "Canadian Exports of Business and Education Services to the Asia-Pacific region,"
    in R. Harris (ed.), The Asia-Pacific Region in the Global Economy: A Canadian Perspective. (University of Calgary Press, 1996) p. 165-196.
  • "Canada and International Trade: Policies for the 1990s,"
    in F. Hampson and C. Maule (eds.), Canada Among Nations: 1990-1991 (Lorimer Press, 1991) p. 41-64.
  • "Exchange Rates and Export Prices: An Industry Approach,"
    in R. Feenstra (ed.), Trade Policy and International Competitiveness (University of Chicago Press, 1989) p. 185-210.
  • A discussion of "Per-Capita Income as a Basis for Trade,"
    by Linda Hunter and James Markusen, in R. Feenstra (ed.), Empirical Methods in International Trade, (MIT Press, 1988) p. 110-113.
  • "Industrial Adjustment in Canada: Causes and Effects,"
    (with Jeffrey Bernstein) in B. Tomlin and M. Molot (eds.), Canada Among Nations: 1986-1987 (Lorimer Press, 1987) p. 87-105.

Publications from working groups