Economic models

• The Mutable Geography of Firms’ International Trade

  Staff Working Paper 2025-11 Lu Han

  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.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Firm dynamics, International topics, Trade integration JEL Code(s): F, F1, F12, F14, L, L1, L11
• February 21, 2025

  Trade conflict: What can the Bank of Canada do?

  Speech summary Tiff Macklem Mississauga Board of Trade-Oakville Chamber of Commerce Mississauga, Ontario

  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.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Economic models, Housing, Inflation targets, International topics, Monetary policy and uncertainty, Monetary policy framework, Potential output, Productivity, Recent economic and financial developments, Trade integration
• February 21, 2025

  Tariffs, structural change and monetary policy

  Remarks Tiff Macklem Mississauga Board of Trade-Oakville Chamber of Commerce Mississauga, Ontario

  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.

  Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Economic models, Housing, Inflation targets, International topics, Monetary policy and uncertainty, Monetary policy framework, Potential output, Productivity, Recent economic and financial developments, Trade integration

• Differentiable, Filter Free Bayesian Estimation of DSGE Models Using Mixture Density Networks

  Staff Working Paper 2025-3 Chris Naubert

  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.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Economic models JEL Code(s): C, C6, C61, C63, E, E3, E37, E4, E47

• Non-Bank Dealing and Liquidity Bifurcation in Fixed-Income Markets

  Staff Working Paper 2025-2 Michael Brolley, David Cimon

  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.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G2, G20, G21, G23, L, L1, L10, L13, L14
• December 16, 2024

  Lessons for the future

  Speech summary Tiff Macklem Greater Vancouver Board of Trade Vancouver, British Columbia

  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.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Coronavirus disease (COVID-19), Economic models, Expectations, Inflation and prices, Inflation targets, International topics, Monetary policy, Monetary policy communications, Monetary policy framework
• December 16, 2024

  Delivering price stability: Learning from the past, preparing for the future

  Remarks Tiff Macklem Greater Vancouver Board of Trade Vancouver, British Columbia

  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.

  Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Coronavirus disease (COVID-19), Economic models, Expectations, Inflation and prices, Inflation targets, International topics, Monetary policy, Monetary policy communications, Monetary policy framework
• September 19, 2024

  Monetary policy decision-making: Behind the scenes

  Remarks Nicolas Vincent Sherbrooke Chamber of Commerce and Industry Sherbrooke, Quebec

  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.

  Content Type(s): Press, Speeches and appearances Research Topic(s): Central bank research, Credibility, Economic models, Inflation and prices, Inflation targets, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy transmission
• September 19, 2024

  Getting to a monetary policy decision

  Speech summary Nicolas Vincent Sherbrooke Chamber of Commerce and Industry Sherbrooke, Quebec

  External Deputy Governor Nicolas Vincent gives a behind-the-scenes look at how the Bank of Canada’s Governing Council arrives at its monetary policy decisions.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Central bank research, Credibility, Economic models, Inflation and prices, Inflation targets, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy transmission

• Decision Synthesis in Monetary Policy

  Staff Working Paper 2024-30 Tony Chernis, Gary Koop, Emily Tallman, Mike West

  We use Bayesian predictive decision synthesis to formalize monetary policy decision-making. We develop a case-study of monetary policy decision-making of an inflation-targeting central bank using multiple models in a manner that considers decision goals, expectations and outcomes.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Economic models, Monetary policy JEL Code(s): C, C1, C11, C3, C32, C5, C53