May 31, 2018
Inflation and prices
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Bending the Curves: Wages and Inflation
As economic slack continues to be absorbed and the labour market tightens, wage growth and inflation could increase faster than expected, which would suggest convexity in their Phillips curves. This note investigates whether there is convexity in the Phillips curves for Canadian wage growth and inflation by testing different empirical approaches over the post-inflation-targeting period. -
April 25, 2018
Opening Statement before the Standing Senate Committee on Banking, Trade and Commerce
Good afternoon, Mr. Chairman and committee members. Senior Deputy Governor Wilkins and I are pleased to be back before you today to discuss the Bank’s Monetary Policy Report (MPR), which we published last week. When we were last here at the beginning of November, we saw signs that the Canadian economy was moderating after an […] -
April 23, 2018
Opening Statement before the House of Commons Standing Committee on Finance
Good afternoon, Mr. Chairman and committee members. Senior Deputy Governor Wilkins and I are pleased to be with you today to discuss the Bank’s Monetary Policy Report (MPR), which we published last week. At the time of our last appearance in October, we saw signs that the Canadian economy was moderating after an exceptionally strong […] -
State Correlation and Forecasting: A Bayesian Approach Using Unobserved Components Models
Implications for signal extraction from specifying unobserved components (UC) models with correlated or orthogonal innovations have been well investigated. In contrast, the forecasting implications of specifying UC models with different state correlation structures are less well understood. -
Dismiss the Gap? A Real-Time Assessment of the Usefulness of Canadian Output Gaps in Forecasting Inflation
We use a new real-time database for Canada to study various output gap measures. This includes recently developed measures based on models incorporating many variables as inputs (and therefore requiring real-time data for many variables). -
February 15, 2018
Anchoring Expectations: Canada’s Approach to Price Stability
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. -
Non-linéarité de la courbe de Phillips : un survol de la littérature
The paper reviews evidence from the economic literature on the nature of the relationship between excess capacity and inflation, better known as the Phillips curve. In particular, we examine the linearity of this relationship. This is an important issue in the current economic context in which advanced economies are approaching or exceed their potential output. -
Understanding the Time Variation in Exchange Rate Pass-Through to Import Prices
In this paper, we analyze the presence of time variation in the pass-through from the nominal effective exchange rate to import prices for 24 advanced economies over the period 1995–2015. In line with earlier studies in the literature, we find substantial heterogeneity in the level of exchange rate pass-through across countries. -
November 7, 2017
Understanding Inflation: Getting Back to Basics
Governor Stephen S. Poloz discusses how recent weak inflation in Canada and other economies can be explained by fundamental factors.