March 3, 2022
Monetary policy
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March 3, 2022
Getting inflation back to target
Governor Tiff Macklem talks about the Bank of Canada’s decision yesterday to raise its policy interest rate. He explains that after two years of extraordinary stimulus, we are now on a path of rising interest rates. -
February 9, 2022
The role of Canadian business in fostering non-inflationary growth
Governor Tiff Macklem discusses how business investment and stronger productivity are vital to sustaining non-inflationary economic growth. -
February 9, 2022
Producing growth with less inflation
Governor Tiff Macklem discusses how—by investing in technology and people—businesses can help the economy grow more with less inflation. -
Monetary Policy and Redistribution in Open Economies
We study how different types of monetary policy shape the distributional effects of external economic shocks on households’ consumption in a small open economy. Our results present a trade-off between maintaining overall stabilization and controlling consumption inequality. -
On the Wedge Between the PPI and CPI Inflation Indicators
We find that the CPI and PPI inflation indexes co-moved strongly throughout the late 20th century, but their correlation has fallen substantially since the early 2000s. We offer a structural explanation for this divergence based on the growth of global supply chains since 2000. This finding offers a unique perspective for the future design of optimal monetary policy. -
Firm Inattention and the Efficacy of Monetary Policy: A Text-Based Approach
How much attention do firms pay to macroeconomic news? Through a novel text-based measure, two facts emerge. First, attention is polarized. Most firms either never or always pay attention to economic conditions. Second, it is countercyclical. During recessions, more firms pay attention, and firms pay greater attention to macroeconomic news. -
Central Bank Digital Currency and Banking: Macroeconomic Benefits of a Cash-Like Design
Should a CBDC be more like cash or bank deposits? An interest-bearing, cash-like CBDC not only makes payments more efficient but also increases total demand. This has positive effects on other transactions, inducing more deposit taking and lending and, thus, bank intermediation. -
Revisiting the Monetary Sovereignty Rationale for CBDCs
One argument for central bank digital currencies (CBDCs) is that without them, private and foreign digital monies could displace domestic currencies, threatening the central bank’s monetary policy and lender of last resort capabilities. I revisit this monetary sovereignty rationale and offer a wider view—one that considers a broader set of currency functions and captures important cross-country variation. -
December 15, 2021
Building on success
Governor Tiff Macklem speaks about the Bank of Canada’s monetary policy framework review and the agreement between the Government of Canada and the Bank to renew the 2 percent inflation target.