September 7, 2023
Monetary policy framework
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September 7, 2023
Economic progress report: Target in sight, but we’re not there yet
Bank of Canada Governor Tiff Macklem talks about the Bank’s latest interest rate announcement and what’s happening with inflation beyond the headline numbers. He also discusses why the Bank’s 2% inflation target is the right one. -
Gazing at r-star: A Hysteresis Perspective
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. -
November 10, 2022
Getting back to stable prices and a balanced jobs market
Governor Tiff Macklem discusses the relationship between inflation and employment and how the Bank of Canada is working to cool an overheated economy. -
November 10, 2022
Restoring labour market balance and price stability
Governor Tiff Macklem outlines the link between high inflation and tight labour markets. He explains how the Bank is working to rebalance the labour market and discusses how structural changes may influence the supply of workers in Canada. -
Harnessing the benefit of state-contingent forward guidance
A low level of the neutral rate of interest increases the likelihood that a central bank’s policy rate will reach its effective lower bound (ELB) in future economic downturns. In a low neutral rate environment, using an extended monetary policy toolkit including forward guidance helps address the ELB challenge. Using the Bank’s Terms-of-Trade Economic Model, we assess the benefits and limitations of a state-contingent forward guidance implemented within a flexible inflation targeting framework. -
A Horse Race of Monetary Policy Regimes: An Experimental Investigation
How should central banks design monetary policy in stable times and during recessions? We run a horse race between five monetary policy frameworks in an experimental laboratory to assess how well the different approaches can manage the public’s expectations and stabilize the economy. -
July 4, 2022
Household differences and why they matter
Differences in income, wealth and debt across households are important—for the economy, for the health of the financial system and for monetary policy. -
May 3, 2022
The Bank of Canada: A matter of trust
Senior Deputy Governor Carolyn Rogers discusses how the Bank of Canada’s independence and accountability help build public trust. -
May 3, 2022
Earning the trust of Canadians
In her first speech with the Bank of Canada, Senior Deputy Governor Carolyn Rogers talks about how independence and accountability help the Bank build and maintain trust.