Assessing the Impact of Demand Shocks on the US Term Premium Staff Discussion Paper 2018-7 Russell Barnett, Konrad Zmitrowicz During and after the Great Recession of 2008–09, conventional monetary policy in the United States and many other advanced economies was constrained by the effective lower bound (ELB) on nominal interest rates. Several central banks implemented large-scale asset purchase (LSAP) programs, more commonly known as quantitative easing or QE, to provide additional monetary stimulus. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial markets, Interest rates, Monetary policy framework, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E4, E43, E5, E52, E58, E6, E61, E65, G, G1, G12
May 16, 2018 The (Mostly) Long and Short of Potential Output Remarks Lawrence L. Schembri Ottawa Economics Association and CFA Society Ottawa Ottawa, Ontario Deputy Governor Lawrence Schembri discusses the importance of potential output to monetary policy, as well as policy challenges and opportunities in a world of low potential output growth. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Inflation targets, Interest rates, Labour markets, Monetary policy, Monetary policy framework, Potential output, Productivity
How to Manage Macroeconomic and Financial Stability Risks: A New Framework Staff Analytical Note 2018-11 Alexander Ueberfeldt, Thibaut Duprey Financial system vulnerabilities increase the downside risk to future GDP growth. Macroprudential tightening significantly reduces financial stability risks associated with vulnerabilities. Monetary policy faces a trade-off between financial stability and macroeconomic risks. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Economic models, Financial stability, Financial system regulation and policies, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E4, E44, E5, E52, E58, G, G0, G01
Could a Higher Inflation Target Enhance Macroeconomic Stability? Staff Working Paper 2018-17 José Dorich, Nicholas Labelle, Vadym Lepetyuk, Rhys R. Mendes Recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent. We evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the Canadian economy. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Inflation targets, Monetary policy framework JEL Code(s): E, E3, E32, E37, E4, E43, E5, E52
March 22, 2018 Financial Stability: Taking Care of Unfinished Business Remarks Carolyn A. Wilkins Rotman School of Management conference Toronto, Ontario Senior Deputy Governor Carolyn A. Wilkins discusses three areas in which work remains to be done to improve financial stability. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Credit and credit aggregates, Digital currencies and fintech, Financial stability, Financial system regulation and policies, Monetary policy framework, Recent economic and financial developments
February 15, 2018 Anchoring Expectations: Canada’s Approach to Price Stability Remarks Lawrence L. Schembri Manitoba Association for Business Economists Winnipeg, Manitoba Deputy Governor Lawrence Schembri examines the success of the Bank’s monetary policy framework and explains the review being undertaken before its renewal in 2021. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Credibility, Fiscal policy, Inflation and prices, Inflation targets, Monetary policy framework
November 16, 2017 An Initial Assessment of Changes to the Bank of Canada’s Framework for Market Operations Bank of Canada Review - Autumn 2017 Kaetlynd McRae, Sean Durr, David Manzo The Bank of Canada made changes to several of the tools that make up its framework for operations and liquidity provision. These changes came about after a comprehensive re-view of the framework and are designed to help the Bank better achieve its objectives of reinforcing the target for the overnight rate and supporting the well-functioning of Cana-dian financial markets under normal market conditions. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Financial markets, Financial stability, Monetary policy framework, Monetary policy implementation, Monetary policy transmission, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E44, E5, E52, E58, G, G0, G01, G1, G18
Redistributive Effects of a Change in the Inflation Target Staff Analytical Note 2017-13 Robert Amano, Thomas J. Carter, Yaz Terajima In light of the financial crisis and its aftermath, several economists have argued that inflation-targeting central banks should reconsider the level of their inflation targets. While the appropriate level for the inflation target remains an open question, it’s important to note that any transition to a new target would entail certain costs. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Inflation targets, Monetary policy framework JEL Code(s): E, E5, E52, E58
Changes in Monetary Regimes and the Identification of Monetary Policy Shocks: Narrative Evidence from Canada Staff Working Paper 2017-39 Julien Champagne, Rodrigo Sekkel We use narrative evidence along with a novel database of real-time data and forecasts from the Bank of Canada's staff economic projections from 1974 to 2015 to construct a new measure of monetary policy shocks and estimate the effects of monetary policy in Canada. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Central bank research, Econometric and statistical methods, Exchange rate regimes, Inflation and prices, Inflation targets, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E3, E31, E32, E4, E43, E5, E52, E58
September 14, 2017 Bank of Canada Workshop “Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal” Remarks Lawrence L. Schembri Ottawa, Ontario Deputy Governor Lawrence Schembri opens the Bank’s Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal workshop. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Credibility, Inflation and prices, Inflation targets, International topics, Monetary policy framework