We explore two scenarios for potential output growth to gain insights into the economic consequences associated with different possible trade policies. Scenario 1 includes limited US tariffs on Canadian exports. Scenario 2 adds a permanent, broad-based 25% increase in US tariffs on imports from all countries excluding Canada and Mexico.
Exporters frequently change their market destinations. This paper introduces a new approach to identifying the drivers of these decisions over time. Analysis of customs data from China and the UK shows most changes are driven by demand rather than supply-related shocks.
Governor Tiff Macklem discusses how a trade conflict would affect the Canadian economy and monetary policy. He also outlines what the Bank of Canada is focusing on as it renews its monetary policy framework.
Governor Tiff Macklem discusses the potential impact of a trade conflict with the United States. He also launches the review of the Bank’s monetary policy framework.
I develop a method for Bayesian estimation of globally solved, non-linear macroeconomic models. The method uses a mixture density network to approximate the initial state distribution. The mixture density network results in more reliable posterior inference compared with the case when the initial states are set to their steady-state values.
We model non-bank entry into fixed-income markets and state-dependent liquidity. Non-bank financial institutions improve liquidity more during normal times than in stress. Banks may become less reliable to marginal clients, exacerbating the difference in liquidity between normal and stressed times. Central bank lending during stress may limit this harmful division.
In his year-end remarks, Governor Tiff Macklem discusses what the Bank of Canada learned from the pandemic experience and outlines how the Bank is preparing for a more uncertain future.
Governor Tiff Macklem reflects on the lessons learned from the pandemic and its aftermath and outlines how the Bank is preparing for the challenges of the future.
External Deputy Governor Nicolas Vincent gives a behind the scenes look at the rigorous research, analysis and debate that go into every monetary policy decision.