Monetary Policy & Banking

Central Bank Forays Into Unconventional Monetary Policies: Explanation, Assessment, and Implications

— Apr 25, 2023

Central Bank Forays into Unconventional Monetary Policies: Explanation, Assessment, and Implications is a new essay that documents the era of unconventional monetary policies—including Quantitative Easing and Forward Guidance—at both the US Federal Reserve and the Bank of Canada, and assesses the effectiveness of these policies with respect to their contribution to macroeconomic stability.

Canada’s Fiscal Policy Has Undermined Efforts to Tackle Inflation

— Apr 6, 2023

Canada’s Fiscal Policy Has Undermined Efforts to Tackle Inflation finds that the federal government’s decision to increase already high levels of spending and continued budget deficits will hinder the Bank of Canada’s efforts to tame inflation.

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.

Recent Monetary Policy & Banking Commentaries and Blog Posts

Rising prices at the grocery store—it’s complicated

Jock Finlayson

Appeared in the Ottawa Sun, May 10, 2023

In March, food prices were 9 per cent higher than a year earlier.

Outlook for interest rates remains uncertain while governments rack up more debt

Lawrence Schembri, Steven Globerman

Appeared in the Financial Post, March 30, 2023

By 2028, the federal government will add a projected $131.8 billion in debt.

Don’t raise the Bank of Canada’s 2% inflation target

Lawrence Schembri, Steven Globerman

Appeared in the Globe and Mail, March 9, 2023

Reductions in purchasing power tend to be concentrated among lower-income workers.

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.