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We characterize the bias in cross-sectional Hill estimates caused by common underlying factors and propose two simple-to-implement remedies. To test for the presence, direction and size of the bias, we use monthly US stock returns and annual US Census county population data.

Today, I want to share with all of you Canada's perspective on the design of an inflation-targeting system, some of the lessons we have learned over almost 15 years of experience with explicit inflation targets, and some of the challenges that remain. This topic is timely, because the Bank of Canada's inflation-targeting agreement with the Canadian government is up for renewal next year, and I am pleased to note that, earlier today, the Government announced its intention to renew our agreement for another five years.

Senior Deputy Governor Carolyn A. Wilkins discusses the challenges the Bank of Canada is facing as it seeks to renew its inflation-control target in 2021. Kicking off a day-long workshop on the renewal of the monetary policy framework, she explains how the Bank’s research on alternative frameworks is shaping up and invites discussion of how the COVID-19 crisis has changed what is known about alternative policy tools in action.

Inflation in grocery prices picked up in 2025, largely due to rising cost pressures that emerged in late 2024 and worked their way through supply chains. Compared with the cost pressures experienced during the COVID‑19 pandemic, these have been more limited, narrower in scope and more commonly tied to imported items.

The Bank projects that Canadian economic growth will slow to 1.7 per cent this year before rebounding to 2.1 per cent in 2020.

We provide an updated evaluation of the value of various measures of core inflation that could be used in the conduct of monetary policy. We find that the Bank of Canada’s current preferred measures of core inflation—CPI-trim, CPI-median and CPI-common—continue to outperform alternative core measures across a range of criteria.

Inflation measures the rate of growth in prices, and the Bank of Canada aims to keep it at 2%. When inflation is low, stable and predictable, the entire economy works better.

Deputy Governor Toni Gravelle talks about the Bank of Canada’s decision yesterday to leave the policy rate unchanged. He explains the link between supply bottlenecks and high inflation and why the Bank thinks both will ease over time.

In recent years, the Bank has put renewed emphasis on analyzing monetary variables and on developing models that incorporate money as an active part of the transmission mechanism. In this article, Dinah Maclean describes how the monetary aggregates are used in the formulation of monetary policy analysis at the Bank, outlining the key tools and models used. The most important money-based model currently in use is the M1-VECM. In this model, deviations in the money supply from the long-term demand for money cause changes in inflation. The author briefly describes the "active-money" paradigm underlying this model and explains the key equations within it. Other simpler empirical models are also outlined, including single-equation indicator models for output based on the narrow aggregates, a neural network, and a model based on the broader aggregate M2++. A detailed technical annex provides details on model equations and coefficient values.