Bio

Yang Zhang is a Senior Policy Director in the Canadian Economic Analysis (CEA) department, effective since January 2025. In this capacity, she oversees CEA’s projection and model development activities and provides leadership on current and prospective issues related to the Bank’s monetary policy mandate. She also supports the department’s management objectives and provides strategic direction on economic analysis as part of CEA’s senior leadership team.

Yang joined the Bank in 2007 and became a Senior Economist in 2009. She has since held increasingly senior positions in CEA, including Principal Researcher and Principal Economist. In 2019, she became Director of Model Development where she led the efforts to develop and integrate state-of-the-art economic models for the analysis of the Canadian economy and for providing monetary policy advice. In this role, she has led high-quality research supporting the 2021 renewal of the inflation-control agreement. She also led the development of the first Canadian behavioural Agent-Based model used for monetary policy analysis. Since 2023, she has been responsible for leading the development of the Bank’s next generation of monetary policy models.

Throughout her career, Yang has accumulated deep knowledge and expertise in model development and monetary policy analysis. Her recent research work focuses on inflation, supply chain, unconventional monetary policies, and alternative expectation formations in DSGE models. She also conducts research to support social good like health and economic equality, using advanced computational methods including machine learning and artificial intelligence.

Born in China, Ms. Zhang holds a PhD in Economics from University of Ottawa.

Research Field(s): Macroeconomics Monetary Economics

Staff research

The Output-Inflation Trade-off in Canada

Staff discussion paper 2024-7 Stefano Gnocchi, Fanny McKellips, Rodrigo Sekkel, Laure Simon, Yinxi Xie, Yang Zhang
We explain how the Bank of Canada’s policy models capture the trade-off between output and inflation in Canada. We provide new estimates of the trade-off and contrast them with those in the Bank’s macroeconomic models.
Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E3, E31, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

Sources of pandemic-era inflation in Canada: An application of the Bernanke and Blanchard model

Staff analytical note 2024-13 Fares Bounajm, Jean Garry Junior Roc, Yang Zhang
We explore the drivers of the surge in inflation in Canada during the COVID-19 pandemic. This work is part of a joint effort by 11 central banks using the model developed by Bernanke and Blanchard (2023) to identify similarities and differences across economies.
Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E24, E3, E31, E37, E5, E52, E6 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting

Endogenous Credibility and Wage-Price Spirals

Staff working paper 2024-14 Olena Kostyshyna, Tolga Özden, Yang Zhang
We quantitively assess the risks of a wage-price spiral occurring in Canada over history. We find the risk of a wage-price spiral increases when the inflation expectations become unanchored and the credibility of central banks declines.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, E, E0, E00, E4, E47, E7 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

CANVAS: A Canadian Behavioral Agent-Based Model

Staff working paper 2022-51 Cars Hommes, Mario He, Sebastian Poledna, Melissa Siqueira, Yang Zhang
The Bank of Canada’s current suite of models faces challenges in addressing network effects that integrate household and firm-level heterogeneity and their behaviours. We develop CANVAS, a Canadian behavioural agent-based model to contribute to the Bank’s next-generation modelling effort. CANVAS improves forecasting performance and expands capacity for model-based scenario analysis.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, D, D2, D22, D8, D83, E, E1, E17 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting

Harnessing the benefit of state-contingent forward guidance

Staff analytical note 2022-13 Vivian Chu, Yang Zhang
A low level of the neutral rate of interest increases the likelihood that a central bank’s policy rate will reach its effective lower bound (ELB) in future economic downturns. In a low neutral rate environment, using an extended monetary policy toolkit including forward guidance helps address the ELB challenge. Using the Bank’s Terms-of-Trade Economic Model, we assess the benefits and limitations of a state-contingent forward guidance implemented within a flexible inflation targeting framework.
Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E2, E27, E3, E37, E4, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

Household Heterogeneity and the Performance of Monetary Policy Frameworks

Staff working paper 2022-12 Edouard Djeutem, Mario He, Abeer Reza, Yang Zhang
Consumption inequality and a low interest rate environment are two important trends in today’s economy. But the implications they may have—and how those implications interact—within different monetary policy frameworks are not well understood. We study the ranking of alternative frameworks that take these trends into account.
Content Type(s): Staff research, Staff working papers JEL Code(s): D, D3, D31, D5, D52, E, E2, E21, E3, E31, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

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Bank publications

Bank of Canada Review articles

August 18, 2011

Introducing Multiple Interest rates in ToTEM

Bank of Canada Review - Summer 2011 José Dorich, Rhys R. Mendes, Yang Zhang
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.
Content Type(s): Publications, Bank of Canada Review articles

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Journal publications

Journal publications

Other research