Monetary Policy

• Time-Consistent Management of a Liquidity Trap with Government Debt

  Staff Working Paper 2018-38 Dmitry Matveev

  This paper studies optimal discretionary monetary and fiscal policy when the lower bound on nominal interest rates is occasionally binding in a model with nominal rigidities and long-term government debt. At the lower bound it is optimal for the government to temporarily reduce debt.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Fiscal Policy, Monetary Policy JEL Code(s): E, E5, E52, E6, E62, E63

• The Extensive Margin of Trade and Monetary Policy

  Staff Working Paper 2018-37 Yuko Imura, Malik Shukayev

  This paper studies the effects of monetary policy shocks on firms’ participation in exporting. We develop a two-country dynamic stochastic general equilibrium model in which heterogeneous firms make forward-looking decisions on whether to participate in the export market and prices are staggered across firms and time.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, Economic models, Firm dynamics, International topics, Monetary Policy JEL Code(s): E, E5, E52, F, F1, F12, F4, F44

• Central Bank Digital Currency and Monetary Policy

  Staff Working Paper 2018-36 Mohammad Davoodalhosseini

  Many central banks are contemplating whether to issue a central bank digital currency (CDBC). CDBC has certain potential benefits, including the possibility that it can bear interest.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Digital Currencies, Monetary Policy JEL Code(s): E, E4, E42, E5, E50

• Following the Money: Evidence for the Portfolio Balance Channel of Quantitative Easing

  Staff Working Paper 2018-33 Itay Goldstein, Jonathan Witmer, Jing Yang

  Recent research suggests that quantitative easing (QE) may affect a broad range of asset prices through a portfolio balance channel. Using novel security-level holding data of individual US mutual funds, we establish evidence that portfolio rebalancing occurred both within and across funds.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary Policy, Monetary policy implementation, Transmission of monetary policy JEL Code(s): E, E5, E58, G, G2, G23

• The Neutral Rate in Canada: 2018 Estimates

  Staff Analytical Note 2018-22 Xin Scott Chen, José Dorich

  The neutral nominal policy rate serves as a benchmark for assessing the degree of monetary stimulus and provides a medium- to long-run anchor for the policy rate. Since quantitative measures of the neutral rate are subject to considerable uncertainty, Bank staff rely on four different approaches to estimate the Canadian neutral rate.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Economic models, Interest rates, Monetary Policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41

• June 27, 2018 Let Me Be Clear: From Transparency to Trust and Understanding

  Remarks Stephen S. Poloz Greater Victoria Chamber of Commerce Victoria, British Columbia

  Governor Poloz talks about how the Bank is improving communications with the public and helping financial markets understand its monetary policy approach.

  Content Type(s): Press, Speeches Topic(s): Credibility, Financial markets, Inflation targets, Monetary Policy, Recent economic and financial developments, Uncertainty and monetary policy

• May 31, 2018 A Progress Report on the Economy

  Remarks Sylvain Leduc Association des économistes québécois and CFA Québec Québec, Québec

  Deputy Governor Sylvain Leduc discusses the issues that led Governing Council to hold the policy interest rate at 1.25 per cent in their May 30 decision.

  Content Type(s): Press, Speeches Topic(s): Inflation and prices, Interest rates, Labour markets, Monetary Policy, Recent economic and financial developments, Uncertainty and monetary policy

• May 16, 2018 The (Mostly) Long and Short of Potential Output

  Remarks Lawrence Schembri Ottawa Economics Association and CFA Society Ottawa Ottawa, Ontario

  Deputy Governor Lawrence Schembri discusses the importance of potential output to monetary policy, as well as policy challenges and opportunities in a world of low potential output growth.

  Content Type(s): Press, Speeches Topic(s): Inflation targets, Interest rates, Labour markets, Monetary Policy, Monetary policy framework, Potential output, Productivity

• May 1, 2018 Canada’s Economy and Household Debt: How Big Is the Problem?

  Remarks Stephen S. Poloz Yellowknife Chamber of Commerce Yellowknife, Northwest Territories

  Governor Poloz talks about household debt and how it will affect Canada’s economy and monetary policy for years.

  Content Type(s): Press, Speeches Topic(s): Credit and credit aggregates, Financial services, Financial stability, Interest rates, Monetary Policy, Recent economic and financial developments

• How to Manage Macroeconomic and Financial Stability Risks: A New Framework

  Staff Analytical Note 2018-11 Alexander Ueberfeldt, Thibaut Duprey

  Monetary policy decisions need to consider all potential outcomes, not just the most likely path for the economy. This is especially true in the presence of elevated financial system vulnerabilities, which lead to increased downside risks for future growth.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Central bank research, Economic models, Financial stability, Financial system regulation and policies, Interest rates, Monetary Policy, Monetary policy framework JEL Code(s): E, E4, E44, E5, E52, E58, G, G0, G01