Monetary policy

• Recent Evidence on the Resiliency of Flexible Inflation Targeting

  Staff analytical paper 2026-23 Edoardo Briganti, Wei Dong, Olena Kostyshyna, Soyoung Lee, Florent Samson, Rodrigo Sekkel

  This paper assesses the resilience of flexible inflation targeting in the presence of large and persistent supply shocks.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E5, E52 Research Theme(s): Monetary policy, Monetary policy framework and transmission

• Optimal Conventional and Unconventional Monetary Policy Mix

  Staff working paper 2026-18 Sami Alpanda, Serdar Kabaca, Kostas Mavromatis

  We show that in a heterogeneous economy, optimal policy after cost-push shocks raises short-term rates to curb inflation while lowering long-term rates to support indebted households, speeding investment and output recovery while increasing consumption inequality.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E40, E43, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

• Assessing the US and Canadian neutral rates: 2026 update

  Staff analytical paper 2026-21 Felipe Alves, William Beaudoin, Hélène Desgagnés, Wei Dong, Jan David Schneider, Eugene Trostin, Argyn Toktamyssov, Hannes Twieling

  We assess the Canadian nominal neutral rate to be in the range of 2.25% to 3.25%, unchanged from our assessment in 2025. We assess the US nominal neutral rate to be in the range of 2.50% to 3.50%, somewhat higher than the range of 2.25% to 3.25% reported in the 2025 assessment.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E43, E5, E52 Research Theme(s): Monetary policy, Monetary policy framework and transmission

• Assessing global potential output growth: April 2026

  Staff analytical paper 2026-20 Daniel de Munnik, Kristina Hess, Walter Muiruri, Tuuli McCully, Faiza Noor, Sabreena Obaid, Andrew Plummer, Louis Poirier, Abeer Reza, Jillian Schwartz

  We present the annual update of the Bank of Canada staff estimates for global potential output growth. These estimates served as key inputs to the analysis supporting the April 2026 Monetary Policy Report.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E1, E2, F, F0, F1, O, O3, O33, O4 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply, Digitalization and productivity

• Potential output in Canada: 2026 assessment

  Staff analytical paper 2026-19 Alex Chernoff, Christopher Hajzler, Stéphanie Houle, Gabriella Ruggero, Olena Senyuta, Karanbir Sohal, Walter Steingress, Temel Taskin

  Growth in potential output is expected to drop from 2.3% in 2025 to 1.2% in 2026 given slowing population growth, US tariffs and trade policy uncertainty. It is then estimated to pick up to an average of 1.5% over 2027–29 as strengthening business and government investment supports trend labour productivity (TLP). Gradual adoption of artificial intelligence is also expected to lift TLP growth over the projection horizon.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E3, E4, E5 Research Theme(s): Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply

• Integrating Non-traditional Data and AI into Central Banking: A Canadian Perspective

  Staff analytical paper 2026-17 James Chapman, Ajit Desai, Maryam Haghighi, James (Jim) C. MacGee

  This paper reviews how central banks are integrating non traditional data and artificial intelligence (AI) into policy analysis and operations. Using the Bank of Canada’s experience, it examines emerging applications, governance challenges, and strategic choices for responsibly scaling AI to enhance insight, efficiency, and institutional resilience.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C4, C45, C5, C55, C8, C88, L, L2, L23, M, M1, M15, O, O3, O33 Research Theme(s): Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation, Money and payments, Payment and financial market infrastructures

• Communicating the Future Direction of Policy

  Staff analytical paper 2026-16 Jonathan Witmer, Monica Jain

  This note discusses several ways the BoC could increase communication around future policy, leveraging methods other central banks have used, and discussing the pros and cons of each method for the BoC, keeping in mind that policy rate forecasts typically are not informative beyond 1 or 2 quarters.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E5, E58 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

• How Canada’s counter-tariffs impacted consumer prices

  

  Sparks at Bank article Alberto Cavallo, Olena Kostyshyna, Oleksiy Kryvtsov, Matías Vieyra

  For six months in 2025, Canada imposed counter tariffs on a wide range of goods from the United States. This short and well defined episode offers a unique opportunity to examine how Canadian retailers adjust prices in response to tariffs—and how retailers’ expectations and transparency with consumers affect pricing decisions.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, International trade, finance and competitiveness

• A buoy on funding tides: How client repo demand and dealer constraints lifted CORRA

  Staff analytical paper 2026-15 Jean-Sébastien Fontaine, Neil Maru, Sofia Tchamova

  Pressures on the CORRA benchmark can emerge from the interaction of client borrowing behavior, dealer balance sheet constraints, even if the level of settlement balances is in a range deemed sufficient to meet the requirement of the payment system and the prudential demand of its members.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E5, E52, G, G2, G23 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Monetary policy tools and implementation

• ​​Canada’s shifting position in global maritime trade​

  

  Sparks at Bank article Geoffrey R. Dunbar, Patrick McKelvey, Tessa Peer, Walter Steingress, Ben Tomlin

  Canada’s economic prosperity depends on trade. But global maritime shipping networks have been reshaped in ways that have reduced Canada’s relative connectivity and carrying capacity. This less-central role for the country could mean greater exposure to supply chain disruptions that could increase the cost of doing business.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, International trade, finance and competitiveness