Monetary policy transmission

• November 6, 2024

  Canada’s mortgage market—A question of balance

  Remarks Carolyn Rogers Economic Club of Canada Toronto, Ontario

  Senior Deputy Governor Carolyn Rogers looks at the mortgage market in Canada—past, present and future.

  Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Financial institutions, Financial services, Financial stability, Financial system regulation and policies, Housing, Monetary policy transmission
• November 6, 2024

  Finding balance in the mortgage market

  Speech summary Carolyn Rogers Economic Club of Canada Toronto, Ontario

  Senior Deputy Governor Carolyn Rogers talks about Canada’s mortgage market and how it has evolved over time.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Financial institutions, Financial services, Financial stability, Financial system regulation and policies, Housing, Monetary policy transmission

• Monetary Policy Transmission amid Demand Reallocations

  Staff Working Paper 2024-42 Julien Bengui, Lu Han, Gaelan MacKenzie

  We analyze the transmission of monetary policy during different phases of a sectoral demand reallocation episode when there are frictions to increasing production in a sector. Monetary policy is more effective in reducing inflation when a larger proportion of sectors are expanding or expect to expand in the near future.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Domestic demand and components, Inflation and prices, Monetary policy transmission JEL Code(s): E, E1, E12, E2, E24, E3, E31, E5, E52

• Monetary Policy Transmission to Small Business Loan Performance: Evidence from Loan-Level Data

  Staff Working Paper 2024-41 Rodrigo Sekkel, Tamon Takamura, Yaz Terajima

  We analyze the dynamic and heterogeneous responses of small-business loan performance to a monetary-policy shock using loan-level data in Canada. We find evidence of monetary policy transmission through the cash-flow channel and the aggregate demand channel as well as some, though limited, impact of collateral to discipline loan repayment.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Monetary policy transmission JEL Code(s): C, C3, C32, E, E1, E17, E3, E37, E5, E52

• From Micro to Macro Hysteresis: Long-Run Effects of Monetary Policy

  Staff Working Paper 2024-39 Felipe Alves, Giovanni L. Violante

  We explore the long-run effects of a monetary policy shock in a Heterogeneous Agent New Keynesian model built on the micro evidence that job losses lead to persistently lower individual earnings through a combination of skill decay and abandonment of the labour force.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Labour markets, Monetary policy transmission JEL Code(s): E, E2, E21, E24, E3, E31, E32, E5, E52, J, J2, J24, J6, J64
• September 19, 2024

  Monetary policy decision-making: Behind the scenes

  Remarks Nicolas Vincent Sherbrooke Chamber of Commerce and Industry Sherbrooke, Quebec

  External Deputy Governor Nicolas Vincent gives a behind the scenes look at the rigorous research, analysis and debate that go into every monetary policy decision.

  Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Central bank research, Credibility, Economic models, Inflation and prices, Inflation targets, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy transmission
• September 19, 2024

  Getting to a monetary policy decision

  Speech summary Nicolas Vincent Sherbrooke Chamber of Commerce and Industry Sherbrooke, Quebec

  External Deputy Governor Nicolas Vincent gives a behind-the-scenes look at how the Bank of Canada’s Governing Council arrives at its monetary policy decisions.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Central bank research, Credibility, Economic models, Inflation and prices, Inflation targets, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy framework, Monetary policy transmission

• Central Bank Digital Currency and Transmission of Monetary Policy

  Staff Working Paper 2024-27 Saroj Bhattarai, Mohammad Davoodalhosseini, Zhenning Zhao

  Using a general equilibrium model with nominal rigidities and financial frictions, we explore whether introducing a central bank digital currency (CBDC) affects the transmission of monetary policy, and how the effects depend on CBDC design features. We also study whether paying interest on central bank liabilities is contractionary or expansionary.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Interest rates, Monetary policy, Monetary policy framework, Monetary policy transmission JEL Code(s): E, E3, E31, E4, E5, E58, G, G2, G21, G5, G51

• The Output-Inflation Trade-off in Canada

  Staff Discussion Paper 2024-7 Stefano Gnocchi, Fanny McKellips, Rodrigo Sekkel, Laure Simon, Yinxi Xie, Yang Zhang

  We explain how the Bank of Canada’s policy models capture the trade-off between output and inflation in Canada. We provide new estimates of the trade-off and contrast them with those in the Bank’s macroeconomic models.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Inflation and prices, Monetary policy transmission JEL Code(s): E, E3, E31, E5, E52

• Assessing the Impact of the Bank of Canada’s Government Bond Purchases

  Staff Discussion Paper 2024-5 Chinara Azizova, Jonathan Witmer, Xu Zhang

  In March 2020, the Bank of Canada implemented the Government of Canada Bond Purchase Program, eventually purchasing approximately $340 billion of government bonds. In this paper, we analyze the impact of this program on financial market prices and yields as well as on GDP and inflation.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Financial markets, Financial system regulation and policies, Inflation and prices, Monetary policy, Monetary policy transmission JEL Code(s): E, E5, E52, E58, G, G2, G21, G28