Inflation and prices

• Cost Pass-Through with Capacity Constraints and International Linkages

  Staff Working Paper 2023-16 Reinhard Ellwanger, Hinnerk Gnutzmann, Piotr Śpiewanowski

  How are regional cost shocks passed through into global prices? We investigate the role of short-run capacity constraints and show that they can induce stark non-linearities in the pass-through. We highlight this effect for the market for ammonia, a commodity produced largely from natural gas.

  Content Type(s): Staff research, Staff working papers Topic(s): Climate change, Econometric and statistical methods, Inflation and prices, International topics JEL Code(s): L, L1, L13, L6, L65, Q, Q4, Q40, Q5, Q54
• March 9, 2023

  Economic progress report: Thinking globally, acting locally

  Remarks Carolyn Rogers Manitoba Chambers of Commerce Winnipeg, Manitoba

  Senior Deputy Governor Carolyn Rogers discusses the Bank’s latest interest rate decision and recent global and domestic developments, including how Canada’s economic and inflation experience compares with other countries.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Domestic demand and components, Firm dynamics, Inflation and prices, Inflation targets, Interest rates, International topics, Labour markets, Monetary policy, Price stability, Recent economic and financial developments
• March 9, 2023

  Understanding the reasons for high inflation

  Speech summary Carolyn Rogers Manitoba Chambers of Commerce Winnipeg, Manitoba

  Speaking a day after we decided to hold the policy rate, Senior Deputy Governor Carolyn Rogers talks about the factors behind high inflation and how we know inflation is falling.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Domestic demand and components, Firm dynamics, Inflation and prices, Inflation targets, Interest rates, International topics, Labour markets, Monetary policy, Price stability, Recent economic and financial developments

• Firms’ inflation expectations and price-setting behaviour in Canada: Evidence from a business survey

  Staff Analytical Note 2023-3 Ramisha Asghar, James Fudurich, Jane Voll

  Canadian firms’ expectations for high inflation may be influencing their price setting, supporting strong price growth and delays in the transmission of monetary policy. Using data from the Business Outlook Survey, we investigate the reasons behind widespread price growth seen in Canada in 2021 and early 2022.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Firm dynamics, Inflation and prices, Monetary policy transmission, Recent economic and financial developments JEL Code(s): D, D2, D22, E, E3, E31

• Inflation, Output, and Welfare in the Laboratory

  Staff Working Paper 2023-11 Janet Hua Jiang, Daniela Puzzello, Cathy Zhang

  We investigate the effect of inflation on output and welfare in the laboratory. Consistent with monetary theory, we find that inflation acts as a tax on monetary exchange and reduces output and welfare.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation and prices, Inflation: costs and benefits, Monetary policy JEL Code(s): C, C9, C92, D, D8, D83, E, E4, E40
• February 7, 2023

  Monetary policy at work

  Remarks Tiff Macklem CFA Québec Québec, Québec

  Bank of Canada Governor Tiff Macklem explains how recent interest rate increases work their way through the Canadian economy to slow demand and bring inflation down.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments
• February 7, 2023

  Higher interest rates are working

  Speech summary Tiff Macklem CFA Québec Québec, Québec

  Governor Tiff Macklem explains how the Bank of Canada’s increases to the policy interest rate will cool the economy and bring inflation down.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments

• The 2021–22 Surge in Inflation

  Staff Discussion Paper 2023-3 Oleksiy Kryvtsov, James (Jim) C. MacGee, Luis Uzeda

  The rise in inflation in 2021–22 sparked a growing literature and debate over the causes of the surge as well as the near- and medium-term path for inflation. This review offers three key messages.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Inflation and prices, Inflation targets, Monetary policy JEL Code(s): E, E3, E31, E5, E52, E58

• Gazing at r-star: A Hysteresis Perspective

  Staff Working Paper 2023-5 Paul Beaudry, Katya Kartashova, Césaire Meh

  Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to show that the major change driving household asset demand over this period is instead an increased desire—for a given age and income level—to hold assets.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Fiscal policy, Inflation and prices, Inflation targets, Interest rates, Monetary policy, Monetary policy framework JEL Code(s): E, E2, E21, E3, E31, E4, E43, E5, E52, E58, E6, E62, G, G5, G51, H, H6

• Are Temporary Oil Supply Shocks Real?

  Staff Working Paper 2022-52 Johan Brannlund, Geoffrey R. Dunbar, Reinhard Ellwanger

  Hurricanes disrupt oil production in the Gulf of Mexico because producers shut in oil platforms to safeguard lives and prevent damage. We examine the effects of these temporary oil supply shocks on real economic activity in the United States.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Inflation and prices JEL Code(s): E, E3, E31, E32, Q, Q3, Q31, Q4, Q41, Q43