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This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates served as key inputs to the analysis supporting the April 2025 Monetary Policy Report.

Should a CBDC be more like cash or bank deposits? An interest-bearing, cash-like CBDC not only makes payments more efficient but also increases total demand. This has positive effects on other transactions, inducing more deposit taking and lending and, thus, bank intermediation.

We analyze the value proposition and limitations of decentralized finance (DeFi). Based on a distributed ledger and smart contracts, DeFi can guarantee the execution of financial contracts, potentially lowering the costs of intermediation and improving financial inclusion.

The initiatives reviewed by the author were undertaken to ensure a liquid and well-functioning market for Government of Canada securities in light of the significant shift in the government's financial position. They include changes made in 1998 by the Bank of Canada and the government to the rules governing auctions and to the Bank's surveillance of the auction process, changes to the treasury bill and bond programs, and implementation of a pilot buyback program for Government of Canada marketable bonds. In addition, the Investment Dealers Association of Canada adopted a code of conduct for the secondary market. These initiatives were well received by the market and appear to have had a positive impact. The Bank and the government are, however, continuing their search for ways to maintain and enhance the efficiency of this market.

The Bank of Canada maintains regular contact with financial institutions as part of the information-gathering process that feeds into the larger set of information used to arrive at its monetary policy decision. Since 1999, the Bank has been conducting a quarterly survey of the business-lending practices of major Canadian financial institutions. Analysis of the information collected shows that it is correlated with future growth in both credit and business investment. This article focuses on how the survey is conducted and describes the construction of the summary statistics, highlighting the key statistical relationships in the historical survey data.

How might one simulate a million realistic income paths and compute their statistical moments in under a second? Using CUDA-based methods to estimate the Canadian earnings process, I find that the distribution of labour income growth is sharply peaked with heavy tails—similar to that in the United States.

This paper examines how climate change affects income inequality across US states. Using a new climate-inequality VAR and a century of daily temperature data, it shows that shifts across the full temperature distribution—not just average warming—have diverse effects on within-state inequality.

We propose a simple, model-free way to measure selection in price setting and its contribution to inflation dynamics. The proposed measure of price selection is based on the observed comovement between inflation and the average level from which adjusting prices depart.

In this piece we show that a limit on the level of asset encumbrance and minimum capital requirements are effective tools for minimizing the incentive for banks to take excessive risk.

Why do BigTech platforms introduce payment services? We explore this using a model in which a monopoly platform faces a trade-off between the costs associated with privacy concerns and the revenue from data services. We then analyze the feedback effects between data and payments.