Olivier Gervais is a Principal Economist in the Projection Division of the Canadian Economic Analysis department. His primary interests include economic forecasting, monetary policy, and macroeconomic modeling. Prior to joining CEA in 2011, Olivier worked in the Global Issues Division of the International Economic Analysis department. He holds a Master’s degree in economics from the University of Québec in Montréal (UQAM).
This note reviews the channels through which scheduled minimum wage increases over the coming years may affect Canadian economic activity and inflation and assesses their macroeconomic impacts. From reduced-form estimates of direct minimum wage pass-through, we find that consumer price index (CPI) inflation could be boosted by about 0.1 percentage point (pp) on average in 2018.
We construct an alternative scenario in which trend labour input and business investment are stronger than that expected in the Bank of Canada’s base-case projection in the October 2017 Monetary Policy Report.
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.
"Current Account Dynamics, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market Economies" (with Lawrence Schembri and Lena Suchanek), Journal of Development Economics, Vol. 119, March 2016, p. 86-89.