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.

Recent Monetary Policy & Banking Commentaries and Blog Posts

Bank of Canada adopts transparency reforms but still lags behind other central banks

Lawrence Schembri, Steven Globerman

Appeared in the Financial Post, January 11, 2023

Other central banks publish a projected interest rate path consistent with their economic outlook—not so in Canada.

Bank of Canada must stay aggressive to tame inflation

Livio Di Matteo

Ottawa is spending nearly one-third more than it was in 2019 before the pandemic.

Nobel Prize awarded to supporters of central banking

David R. Henderson

Bernanke chose to pay interest on bank reserves, which caused banks to hold onto reserves rather than lend them out.

Independent central bank may be only defense against Ottawa’s ‘crisis’ management

Steven Globerman

Appeared in the Globe and Mail, September 15, 2022

The central bank has acknowledged that it underestimated the inflationary effects of its actions.

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.