Sharon Kozicki was appointed Deputy Governor of the Bank of Canada, effective August 2, 2021. In this role, she oversees the Bank’s analysis of domestic economic developments and, as a member of Governing Council, shares responsibility for decisions about monetary policy, the stability of the financial system and the strategic direction of the Bank.
At the time of her appointment, Ms. Kozicki was Secretary to Governing Council and Advisor to the Governor on subjects related to the Canadian economy and monetary policy. She also led the Bank’s review of the monetary policy framework for the 2016 renewal of the inflation-targeting agreement with the Government of Canada.
Between 2010 and 2013, Ms. Kozicki was Managing Director of the Bank’s Canadian Economic Analysis Department, responsible for briefing Governing Council about developments in the Canadian economy to inform monetary policy decisions. She oversaw long-term research on the operation of the economy, inflation, macrofinancial linkages, and the transmission channels of domestic and international monetary policies. Ms. Kozicki also served as Deputy Managing Director of the Bank’s International Economic Analysis Department between 2008 and 2010.
Before joining the Bank in 2006, Ms. Kozicki was an economist with the Board of Governors of the Federal Reserve System in Washington, D.C., and Vice President and Economist at the Federal Reserve Bank of Kansas City.
Born in Ottawa, Ms. Kozicki has a bachelor of science degree and a master’s degree in economics from the University of Toronto and a PhD from the University of California San Diego.
A world of difference: Households, the pandemic and monetary policyBank of Canada Deputy Governor Sharon Kozicki discusses how differences among households affect economic outcomes, how shocks can have important uneven effects across households, and why these things matter for monetary policy.
Staff discussion papers
Summaries of Central Bank Policy Deliberations: A Canadian ContextThis paper provides the context, rationale and key considerations that informed the Bank of Canada’s decision to publish a summary of monetary policy deliberations. It includes an analysis of how other central banks disclose minutes and summaries of their monetary policy deliberations.
Implementation and Effectiveness of Extended Monetary Policy Tools: Lessons from the LiteratureThis paper summarizes the literature on the performance of various extended monetary policy tools when conventional policy rates are constrained by the effective lower bound. We highlight issues that may arise when these tools are used by central banks of small open economies.
Communicating Uncertainty in Monetary PolicyWhile central banks cannot provide complete foresight with respect to their future policy actions, it is in the interests of both central banks and market participants that central banks be transparent about their reaction functions and how they may evolve in response to economic developments, shocks, and risks to their outlooks.
Staff working papers
Large-Scale Asset Purchases: Impact on Commodity Prices and International Spillover EffectsPrices of commodities, including metals, energy and agricultural products, rose markedly over the 2009–2010 period. Some observers have attributed a significant part of this increase in commodity prices to the U.S. Federal Reserve’s large-scale asset purchase (LSAP) programs.
A New Data Set of Quarterly Total Factor Productivity in the Canadian Business SectorIn this paper, a quarterly growth-accounting data set is built for the Canadian business sector with the top-down approach of Diewert and Yu (2012). Inputs and outputs are measured and used to estimate the quarterly total factor productivity (TFP).
House Price Dynamics: Fundamentals and ExpectationsWe investigate whether expectations that are not fully rational have the potential to explain the evolution of house prices and the price-to-rent ratio in the United States.
Estimating DSGE-Model-Consistent Trends for Use in ForecastingThe 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.
Estimation and Inference by the Method of Projection Minimum DistanceA covariance-stationary vector of variables has a Wold representation whose coefficients can be semi-parametrically estimated by local projections (Jordà, 2005). Substituting the Wold representations for variables in model expressions generates restrictions that can be used by the method of minimum distance to estimate model parameters.
Term Structure Transmission of Monetary PolicyUnder bond-rate transmission of monetary policy, the authors show that a generalized Taylor Principle applies, in which the average anticipated path of policy responses to inflation is subject to a lower bound of unity. This result helps explain how bond rates may exhibit stable responses to inflation, even in periods of passive policy.
Perhaps the FOMC Did What It Said It Did: An Alternative Interpretation of the Great InflationThis paper uses real-time briefing forecasts prepared for the Federal Open Market Committee (FOMC) to provide estimates of historical changes in the design of U.S. monetary policy and in the implied central-bank target for inflation. Empirical results support a description of policy with an effective inflation target of roughly 7 percent in the 1970s.
Survey-Based Estimates of the Term Structure of Expected U.S. InflationSurveys provide direct information on expectations, but only short histories are available at quarterly frequencies or for long-horizon expectations.
Bank of Canada Review articles
Unconventional Monetary Policy: The International Experience with Central Bank Asset PurchasesAs part of their policy response to the financial crisis of 2007–09, central banks introduced numerous unprecedented monetary policy measures to provide monetary easing. This article defines and documents these measures, focusing on central bank asset purchases and their impact on central bank balance sheets. It then discusses the challenges of identifying the effects of these measures and explores possible exit strategies. The potential costs of these policies are also analyzed, as well as the broader implications for monetary policy frameworks.
The Economy, Plain and Simple
Household differences and why they matterDifferences in income, wealth and debt across households are important—for the economy, for the health of the financial system and for monetary policy.
Price check: Inflation in CanadaWhy prices change, and what it means for the economy.
- "House price dynamics: Fundamentals and expectations",
(with Eleonora Granziera), Journal of Economics Dynamic and Control, Volume 60, pages 152-165, November 2015.
- "Effective Use of Survey Information in Estimating the Evolution of Expected Inflation",
(with P. Tinsley), Journal of Money, Credit and Banking, 44(1): 145-169, 2012.
- "Macro Has Progressed"
Journal of Macroeconomics, 34(1): 23-28, 2012.
- "Estimation and Inference by the Method of Projection Minimum Distance: An Application to the New Keynesian Hybrid Phillips Curve.”
(with O. Jorda) in International Economic Review, 52 (2): 461‐87, 2011
- "Perhaps the FOMC did what it said it did: An Alternative interpretation of the Great Inflation,"
(with P. A. Tinsley) Journal of Monetary Economics, Volume 56:6;, 842-855, September 2009.
- "Term Structure Transmission of Monetary Policy"
(with P.A. Tinsley) North American Journal of Economics and Finance, vol. 19(1), pages 1-92, March 2008.
- "Minding the Gap: Central Bank Estimates of the Unemployment Natural Rate"
(with P.A. Tinsley) in Computational Economics, 27(2-3), 295-327, April-May 2006.
- "Estimating Equilibrium Real Interest Rates in Real Time"
(with Todd Clark) North American Journal of Economics and Finance, 16, 395-413, 2005.
- "Permanent and Transitory Policy Shocks under Asymmetric Information"
(with P.A. Tinsley) Journal of Economic Dynamics and Control, 29, 1985-2015, 2005.
- "What do you expect? Imperfect Policy Credibility and Tests of the Expectations Hypothesis"
(with P.A. Tinsley) Journal of Monetary Economics, 52:2, March 2005.
- "Rounding Error: A Distorting Influence on Index Data"
(with Barak Hoffman) Journal of Money, Credit, and Banking, 36, 319-338, June 2004.
- "Dynamic Specifications in Optimizing Trend-Deviation Macro Models"
(with P.A. Tinsley) Journal of Economic Dynamics and Control, 26, 2002.
- "Shifting Endpoints in the Term Structure of Interest Rates"
(with P.A. Tinsley) Journal of Monetary Economics, 47, 613-652, 2001.
- "Term Structure Views of Monetary Policy Under Alternative Models of Agent Expectations"
(with P.A. Tinsley) Journal of Economic Dynamics and Control, 25, 149-184, 2001.
- "Rational Vector Error Correction"
(with P.A. Tinsley) Journal of Economic Dynamics and Control, 23, 1299-1327, 1999.
- "Multivariate Detrending under Common Trend Restrictions: Implications for Business Cycle Research"
Journal of Economic Dynamics and Control, 23, 997-1028, 1999.
- "Moving Endpoints and the Internal Consistency of Agents' Ex Ante Forecasts"
(with P.A. Tinsley) Computational Economics, 11, 21-40, 1998.
- "Testing for Common Features"
(with Robert F. Engle) Journal of Business and Economic Statistics, 11, 369-380, 1993.
(with Robert F. Engle), (reply to discussants of "Testing for Common Features," published in the same volume), Journal of Business and Economic Statistics, 11, 393-395, 1993.
- "Central Bank Balance Sheets and Long Term Forward Rates,"
(with Eric Santor and Lena Suchanek) In Interest Rates, Prices and Liquidity: Lessons from the Financial Crisis, edited by Jagjits S. Chadha and Sean Holly.New York: Cambridge University Press, p.172-194.
- "Parsing Shocks: Real-Time Revisions to Gap and Growth Projections for Canada"
(with Russell Barnett and Christopher Petrinec) Federal Reserve Bank of St. Louis Review, Volume 91, Number 4, pp 247-265, July/August 2009.
- "Longer-Term Perspectives on the Yield Curve and Monetary Policy"
(with Gordon H. Sellon Jr.) Federal Reserve Bank of Kansas City Economic Review, Fourth Quarter 2005.
- "How do Data Revisions affect the Evaluation and Conduct of Monetary Policy"
Federal Reserve Bank of Kansas City Economic Review, First Quarter 2004. (Translated into Spanish by the Centre for Latin American Monetary Studies and published: "¿De qué forma afectan las revisions de datos a la evaluación y conducción de la política monetaria?" monetaria, Octubre-Diciembre, 2004.)
- "Why Do Central Banks Monitor So Many Inflation Indicators?"
Federal Reserve Bank of Kansas City Economic Review, Third Quarter 2001.
- "How Useful are Taylor Rules for Monetary Policy?"
Federal Reserve Bank of Kansas City Economic Review, Second Quarter 1999.
- "Predicting Real Growth and Inflation with the Yield Spread"
Federal Reserve Bank of Kansas City Economic Review, Fourth Quarter 1997.
- "The Productivity Growth Slowdown: Diverging Trends in the Manufacturing and Service Sectors"
Federal Reserve Bank of Kansas City Economic Review, First Quarter 1997.
- "The Behavior of Long-Term Interest Rates in the FRB/US Model"
(with David Reifschneider and P.A. Tinsley) in The Determination of Long-Term Interest Rates and the Role of Expectations, BIS Conference Papers, 2, August 1996.
- "Discussion" (comments on 'Estimating Forward-Looking Euler Equations with GMM and Maximum Likelihood Estimators: An Optimal Instruments Approach,' by Jeffrey C. Fuhrer and Giovanni P. Olivei,) proceedings of the March 2004 Federal Reserve Board conference Models and Monetary Policy: Research in the Tradition of Dale Henderson, Richard Porter, and Peter Tinsley, 115-125, 2005.
- "Comments on 'Forecasting with a Real-Time Data Set for Macroeconomists'"
Journal of Macroeconomics, 24, 2002.
- "Term Premia: Endogenous Constraints on Monetary Policy"
(with P.A. Tinsley) Federal Reserve Bank of Kansas City Working Paper RWP 02-07.
- "Revisiting a Test of the CAPM"
(with Pu Shen). (An earlier version of the paper appeared as Federal Reserve Bank of Kansas City Working Paper 97-06 with the title "Breathing Room for Beta.")
- "Predicting Inflation with the Term Structure Spread"
Federal Reserve Bank of Kansas City Working Paper 98-02.
- "The Comovement of Output and Labor Productivity in Aggregate Data for Auto Assembly Plants"
(with Ana Aizcorbe), Federal Reserve Board Finance and Economics Discussion Series 95-33.
- "Balancing Theory and Empirical Fit in Structural Macroeconomic Modeling"
(with Mark French, Eileen Mauskopf, Peter von zur Muehlen) Federal Reserve Board, Mimeo, December 1994.
- "A Nonlinear Model of the Term Structure"
Federal Reserve Board, Mimeo, March 1994.
- "Techniques for Estimating Dynamic Comovement with an Application to Common International Output Fluctuations"
Federal Reserve Board Finance and Economics Discussion Series 93-32.
- "Monthly Estimates of Canadian GDP and its Price Deflator"
Bank of Canada Technical Working Paper 89-2.
- Executive Council, Canadian Economic Association, 2007 – 2010
- Editorial Board, Journal of Macroeconomics, 2003 – Current
- Associate Editor, Journal of Applied Econometrics, 2006 – Current
- Associate Editor, Macroeconomic Dynamics, 2006 – Current
- Member of the Society of Computational Economics (SCE) Advisory Committee, 2004-2007