Monetary Policy & Banking

The Ebb and Flow of Bank of Canada Independence

— Apr 28, 2022

The Ebb and Flow of Bank of Canada Independence is a new study that finds for an optimal relationship between the Bank of Canada and the federal government to exist, the bank must make the costs and consequences of inflation clear to the public while the government must ensure the bank operates under their agreement that inflation targeting has in fact served Canadians well.

A Primer on Inflation

— Apr 14, 2022

A Primer on Inflation argues that while Canada experiences its highest inflation rate in decades, the causes, consequences—and crucially, the beneficiaries—of inflation remain largely unknown to many Canadians.

The Misery Index Returns

— Jan 18, 2022

The Misery Index Returns is a new study that finds of the International Monetary Fund’s 35 most advanced economies, Canada has the 6th worst Misery Index score due to the country’s higher inflation rate coupled with higher unemployment.

The Outlook for Inflation and Its Links to Monetary Policy

— Dec 2, 2021

The Outlook for Inflation and Its Links to Monetary Policy finds that, absent a change in policy at the Bank of Canada, higher inflation rates may persist even after the pandemic subsides due to several factors including the country's aging population.

A Primer on Modern Monetary Theory

— May 18, 2021

A Primer on Modern Monetary Theory is a new study that finds that if the Bank of Canada continues to finance government debt by printing money without a clear commitment to repayment—also known as Modern Monetary Theory (MMT)—it would pose enormous risks to the Canadian economy. Where MMT has been tried in the past, it has resulted in inflation, sometimes even hyper-inflation, with devastating consequences for domestic economies.

Reforming BC Auto Insurance to Benefit Consumers

— Oct 29, 2020

Reforming BC Auto Insurance to Benefit Consumers finds that the Government of British Columbia’s ICBC reforms haven’t gone far enough and maintain ICBC’s monopoly on basic automobile insurance—which keeps rates higher than they would be in a more open insurance market.

Recent Monetary Policy & Banking Commentaries and Blog Posts

Inflation in Canada—follow the money

Robert P. Murphy

Appeared in the Hub, June 17, 2022

The Bank of Canada's “easy” policies help explain the current pain at the pumps.

Canadians relearning hard economic lessons of ’70s and ’80s

Livio Di Matteo

Persistent labour shortages are helping drive up costs.

Inflation—why now and not post-2008?

Ross McKitrick

Appeared in the Financial Post, May 21, 2022

While the Bank of Canada is beginning to shed assets, it will take sustained aggressive action to get control of the situation.

Canadians suffering from Ottawa’s ‘fairy dust’ approach

Jason Clemens, Niels Veldhuis

Appeared in the Toronto Sun, May 18, 2022

Last election, the prime minister said he doesn’t worry about monetary policy.

Latest agreement leaves Bank of Canada’s responsibilities unclear

John Chant

The 2021 agreement introduced a new goal—that monetary policy should also support maximum “sustainable” employment.

Ottawa threatening Bank of Canada’s independent image

Steven Globerman

Appeared in the National Post, May 5, 2022

The goal of "maximum sustainable employment" is largely determined by forces beyond the central bank’s control.

Ottawa benefits from inflation-spurred tax revenue

Steven Globerman

Appeared in the Globe and Mail, April 15, 2022

Government tax revenues can increase even though the inflation-adjusted incomes of most Canadians do not.

Bank of Canada rate hike may be too little too late

Livio Di Matteo

Ramping up interest rates at this juncture places more of the burden of fighting inflation on consumers.

Canada faces perfect inflation storm

Steven Globerman

Appeared in the Epoch Times, March 23, 2022

The move by governments worldwide to substantially reduce the use of carbon fuels will likely produce even slower productivity growth.

Bank of Canada could muddy price signals with aggressive monetary policy

Steven Globerman

Appeared in the Epoch Times, February 2, 2022

If the inflation rate remains relatively stable over time, suppliers should know when higher prices signal increased scarcity.