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Using a controlled macroeconomic experiment, we compare monetary policy rules that differ in how much they look through inflation: a Lean-Against policy with strong response to inflation and a Look-Through policy with less strong response. We combine each rule with communication protocols that vary the information the central bank releases about its policy response.

Positive commodity price shocks reduce labor income inequality in commodity-exporting economies by compressing the skill premium, as unskilled-labor-intensive sectors such as construction expand faster than skill-intensive services. A multisector small-open-economy model shows how saving or spending commodity windfalls can reinforce or moderate this decline in inequality.

Canadian housing imbalances have elevated shelter inflation as a driver of CPI, fueled by high house prices, mortgage costs, rents, supply constraints, and leverage. This note uses a model with housing supply and extrapolative expectations to assess whether monetary policy should incorporate or look through shelter inflation under demand and supply shocks.

We examine the effects of monetary policy shocks on the Canadian housing market. Using high-frequency surprises around fixed announcement dates as an instrument in a Bayesian VAR, we estimate the responses of house prices, housing starts, building permits, resales, inventories, and mortgage purchases to a contractionary monetary policy shock. An increase in the policy rate leads to a substantial and persistent decline in average house prices. Housing starts and building permits fall, but their implied effects on the future housing stock are both slow and modest. Interpreted through the lens of market equilibrium, these results are most consistent with a stronger response of housing demand than housing supply.

This paper examines how auction timing may affect sovereign issuance outcomes through its interaction with market volatility. Using Canada as a case study, it shows that: (1) higher same-day bond market volatility is associated with larger auction tails, indicating weaker demand conditions; and (2) monetary policy announcements and certain macroeconomic data releases are systematically associated with higher same-day volatility.

We develop a news-based measure of perceived financial stress for Canada using Globe and Mail articles since 1977. We show that news shocks primarily impact unsecured households credit, consistent with household precautionary behavior.

Using proprietary FXC Intelligence data on quoted prices for Canadian business-to-business cross-border payments, this note finds that banks charge firms around 2–3.5% of transaction value. Prices vary considerably across banks for the same corridor, transaction amount, and year.

Using Canadian firm-level market shares and an oligopolistic model, the paper shows that a 25% counter-tariff on U.S. imports raises Canada's aggregate price index by 0.66%, far below direct cost pass-through predictions due to consumer substitution and markup adjustments.

We develop a framework to quantify how tariff changes on imported goods affect sectoral and aggregate consumption prices through direct and production-network channels. Using Canada's input-output matrix and administrative firm-good import data for the universe of Canadian firms, we estimate price elasticities for tariffs on U.S.-imported goods.

Prima is the Bank of Canada’s new model for projection and policy analysis. It builds on the economic foundations of earlier Bank models, adding detail on how sectoral pressures affect production costs and their pass-through to consumer prices.