Central bank research
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How to Manage Macroeconomic and Financial Stability Risks: A New Framework
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. -
February 15, 2018 Anchoring Expectations: Canada’s Approach to Price Stability
Deputy Governor Lawrence Schembri examines the success of the Bank’s monetary policy framework and explains the review being undertaken before its renewal in 2021. -
February 8, 2018 At the Crossroads: Innovation and Inclusive Growth
Senior Deputy Governor Carolyn A. Wilkins discusses technological progress and how policy-makers can harness it for economic growth that benefits everyone. -
How Do Central Bank Projections and Forward Guidance Influence Private-Sector Forecasts?
We construct a 23-country panel data set to consider the effect of central bank projections and forward guidance on private-sector forecast disagreement. We find that central bank projections and forward guidance matter mainly for private-sector forecast disagreement surrounding upcoming policy rate decisions and matter less for private-sector macroeconomic forecasts. -
Competing Currencies in the Laboratory
We investigate competition between two intrinsically worthless currencies as a result of decentralized interactions between human subjects. We design a laboratory experiment based on a simple two-country, two-currency search model to study factors that affect circulation patterns and equilibrium selection. -
November 15, 2017 Embracing Uncertainty in the Conduct of Monetary Policy
Senior Deputy Governor Carolyn A. Wilkins explains how uncertainty is factored into monetary policy decisions. -
Changes in Monetary Regimes and the Identification of Monetary Policy Shocks: Narrative Evidence from Canada
We use narrative evidence along with a novel database of real-time data and forecasts from the Bank of Canada's staff economic projections from 1974 to 2015 to construct a new measure of monetary policy shocks and estimate the effects of monetary policy in Canada. -
September 14, 2017 Bank of Canada Workshop “Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal”
Deputy Governor Lawrence Schembri opens the Bank’s Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal workshop. -
September 14, 2017 Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal
Senior Deputy Governor Carolyn A. Wilkins reviews key themes discussed by participants at the workshop “Monetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal”. -
How to Predict Financial Stress? An Assessment of Markov Switching Models
This paper predicts phases of the financial cycle by using a continuous financial stress measure in a Markov switching framework. The debt service ratio and property market variables signal a transition to a high financial stress regime, while economic sentiment indicators provide signals for a transition to a tranquil state.