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There was an unusually large decline of bank notes in circulation in October 2018. Some have argued that this was due to the legalization of cannabis in Canada in mid-October.

The Bank expects a sharp rebound in economic activity in the reopening phase of the recovery, followed by a more prolonged recuperation phase.

In recent months, much has been said, and written, about developments in financial markets. The turbulence in global credit markets, which had its roots in developments in the market for subprime mortgages here in the United States, has been a focal point of attention for market participants and policy-makers around the world.

Building on an earlier Review article, the authors critically reassess the premise that exchange rate pass-through (ERPT) has declined in light of recent studies of the issue in the context of a dynamic stochastic general-equilibrium framework.

Last week, we released our eleventh Monetary Policy Report. Since our November Report, the Canadian economy has outperformed expectations. Bolstered by vigorous external and domestic demand, Canada's economic expansion strengthened in the second half of 1999 and into early 2000.

In 1994, broad monetary aggregates such as M2+ grew at an unusually slow rate, indicating a continuation of low inflation. Narrow money, M1, ballooned early in the year, partly for technical reasons. However, its overall deceleration for the year as a whole would be consistent with lower output growth in the first half of 1995 than was seen the year before. During the first half of 1994, there was a continued shift by investors from deposits into equity, bond and mortgage mutual funds. In the second half of the year, following a rise in interest rates and a fall in the yields posted by mutual funds, there was a movement back into M2+. In this annual review of the monetary aggregates, the author discusses the reasons for these shifts and their implications for M2+.

Three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in the prices of certain commodities — particularly energy. The first two developments are evolving roughly in line with expectations outlined in the April Monetary Policy Report.

This article outlines one of the Bank's key approaches to dealing with the uncertainty that surrounds decisions on monetary policy: the consideration of a wide range of information from a variety of sources. More specifically, it describes the information and analysis that the monetary policy decision-makers—the Governing Council of the Bank of Canada—receive in the two or three weeks leading up to a decision on the setting of the policy rate—the target overnight interest rate. The article also describes how the Governing Council reaches this decision.

This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

Governor Stephen S. Poloz shows how Canada’s economic progress has been driven by its historic preference for openness to immigration, investment and trade.