Monetary policy implementation
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Reviewing Canada’s Monetary Policy Implementation System: Does the Evolving Environment Support Maintaining a Floor System?
At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework. -
Understanding Post-COVID Inflation Dynamics
We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. Our model can generate more sizable inflation surges due to cost-push and demand shocks than a standard linearized model when inflation is high. -
September 20, 2022
Macroeconomics of the 2020s: What we’ve learned, and what’s to come
Deputy Governor Paul Beaudry discusses the macroeconomic lessons we’ve learned during the COVID-19 pandemic, and what lies ahead to bring inflation back to target. -
September 20, 2022
Anatomy of a pandemic: Applying old lessons and learning from new ones
Deputy Governor Paul Beaudry describes how the lessons learned from previous economic crises helped central bankers during the global COVID-19 pandemic. He also talks about how managing inflation expectations can help bring inflation back to target. -
Settlement Balances Deconstructed
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution. -
June 2, 2022
Economic progress report: Navigating a high inflation environment
Bank of Canada Deputy Governor Paul Beaudry talks about the Bank’s latest interest rate announcement and the importance of keeping inflation expectations well anchored to prevent high inflation from becoming entrenched. -
June 2, 2022
Navigating high inflation
On June 1, the Bank of Canada decided to increase its policy interest rate by half a percentage point. Speaking the next day, Deputy Governor Paul Beaudry explains why inflation has been higher than expected and what we are doing to get it back to our 2% target. -
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March 3, 2022
Economic progress report: Controlling inflation
Bank of Canada Governor Tiff Macklem talks about the Bank’s latest interest rate announcement and what’s driving inflation in Canada. He also discusses how the Bank will manage the next step in the Bank’s balance sheet operations – quantitative tightening.