With inflation as measured by the Consumer Price Index (CPI) growing faster than the Bank of Canada’s 2 percent target, the Bank has pointed out that core CPI, which excludes items whose prices are especially volatile, is at or below target and, further, that the Bank anticipates total CPI...

With the Canadian dollar near parity with its US counterpart, monetary policymakers may come under pressure to curb future interest rate increases to limit the loonie’s appreciation. When the value of the loonie is in line with economic fundamentals, such actions would necessarily compromise...

Sticking with the status quo was only one option under debate among monetary experts in the lead-up to renewal of the Bank of Canada’s inflation-targeting mandate, which was announced this week. Several other routes were available. Two of them – namely, targeting nominal GDP or targeting...

Monetary authorities should keep an eye on money growth in the economy to help stimulate and monitor the recovery. Money growth, meaning the pace of expansion in the quantity of money held by the public and readily accessible deposits at financial institutions, is proving prescient in the...

With the economic recovery taking hold and the Bank of Canada’s conditional commitment to keep the overnight rate at 0.25 percent expiring soon, a number of questions about the conduct of monetary policy need to be considered. The author argues the Bank should keep its conditional commitment,...

Financial market participants would benefit from a better understanding of how the Bank of Canada sets the overnight interest rate in response to economic developments. More accurate forecasts of the Bank’s future policy choices would lead to better financial decisions and better price and...

Recent efforts by the Bank of Canada to “talk down” the dollar in its public statements have led to public perceptions that the Bank is considering action to weaken it.In permitting this response to gather momentum, the Bank has stepped onto a slippery slope, because if talk seems to be...

The Bank of Canada must come to play a recognized, central leadership role in shaping policy if Canada is to better manage risks to financial sector stability. This can be accomplished by giving the Bank a clearly acknowledged oversight and investigative mandate regarding financial stability –...

To encourage new growth in the Canadian economy, the Bank of Canada should be actively irrigating financial markets with a growing money supply. Recovery needs support from the continued credibility of the Bank’s 2 percent inflation target – but there are signs that this credibility is...

When trouble in the US housing market this past summer bubbled into problems in credit markets around the world, central banks took action. In a partially successful effort to keep those markets functioning smoothly, several central banks, including the Bank of Canada, took special steps to...