Interest rates
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ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis
ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution. -
A New Measure of Monetary Policy Shocks
Combining various high frequency financial data with central bank projections, I construct a new measure of monetary policy shocks not predictable by the public information preceding a central bank’s announcements. I then study the causal effects of monetary policy on the macro economy. -
Monetary Policy, Trends in Real Interest Rates and Depressed Demand
Over the last few decades, real interest rates have trended downward. The most common explanation is that this reflects depressed demand due to demographic, technological and other real factors. We explore the claim that these trends may have been amplified by certain features of monetary policy. -
June 10, 2021
Going digital has helped the economy through COVID-19
Deputy Governor Timothy Lane talks about the Bank’s decision yesterday to leave the policy rate unchanged. He also discusses how adopting digital technologies supported resilience during the COVID-19 pandemic. -
June 10, 2021
The digital transformation and Canada’s economic resilience
Deputy Governor Tim Lane talks about the Bank’s latest interest rate announcement and discusses how the digital transformation has supported resilience through the pandemic and may be adding to the economy’s growth potential. -
Potential output and the neutral rate in Canada: 2021 update
We expect potential output growth to be higher than in the October 2020 reassessment. By 2024, growth will be slightly above its average growth from 2010 to 2019. We assess that the Canadian nominal neutral rate continues to lie in the range of 1.75 to 2.75 percent. -
Assessing global potential output growth and the US neutral rate: April 2021
We expect global potential output growth to rise to 3 percent by 2022. Relative to the last assessment in October 2020, potential output growth has been revised up across all the regions. The range of the US neutral rate remains unchanged relative to the autumn 2020 assessment. -
Secular Economic Changes and Bond Yields
We investigate the economic forces behind the secular decline in bond yields. Before the anchoring of inflation in the mid-1990s, nominal shocks drove inflation, output and bond yields. Afterward, the impacts of nominal shocks were much less significant. -
Imperfect Banking Competition and Macroeconomic Volatility: A DSGE Framework
How do banks adjust their loan rate markup in response to macroeconomic shocks?