C.D. Howe Institute Monetary Policy Council Urges Bank of Canada to Hold Overnight Rate at 1.00 Percent for Next Six Months; Looks for 1.25 Percent by November 2015
November 27, 2014 — The C.D. Howe Institute’s Monetary Policy Council (MPC) today recommended that the Bank of Canada keep its target for the overnight rate, the very short-term interest rate it targets for monetary policy purposes, at 1.00 percent at its next announcement on December 3, 2014. Looking ahead, the Council called for the Bank to hold the target at 1.00 percent through the spring of 2015, and called for a target of 1.25 a year from now.
The MPC provides an independent assessment of the monetary stance appropriate for the Bank of Canada as it aims for its 2 percent inflation target. Finn Poschmann, the Institute’s Vice President, Policy Analysis, chaired the Council’s 91st meeting.
MPC…
Good Governance of Monetary Policy in Canada: Lessons from the C.D. Howe Institute’s Shadow Council
The Bank of Canada should consider publicly disclosing the discussions and dissenting opinions of members of its interest-rate-setting committee, according to a new C.D. Howe Institute report. In “Good Governance of Monetary Policy in Canada: Lessons from the C.D. Howe Institute’s Shadow Council,” authors Pierre Siklos and Matthias Neuenkirch argue that the existing governance structure […] Voodoo economics: Busting some popular monetary myths: Globe and Mail Op-Ed
Published in the Globe and Mail on September 23, 2014
By Christopher Ragan
Christopher Ragan is an associate professor of economics at McGill University and a Research Fellow at the C.D. Howe Institute.
Last week my friend sent me a link to a short video ranting about our monetary system. I immediately recognized it as another in a large collection of videos I have seen, many of which are sent to me by students pondering the validity of the central messages – which appear quite at odds with the things I say in class.
These videos are filled with so many misconceptions that anyone studying from them would fail an exam in any respectable economics course. Two big monetary myths stand out from the…
Money Still Matters: How the Bank of Canada Might Better Monitor Inflation
The Bank of Canada (BoC) should carefully monitor the money supply to better predict inflation and track the effectiveness of its monetary policy, according to a new C.D. Howe Institute report. In “Money Still Matters: How the Bank of Canada Might Better Monitor Inflation,” author Mati Dubrovinsky suggests the BoC should also pay particular attention to the […] Canada’s Limited Solutions To Its Slow-growth Recovery: Globe And Mail Op-ed
Published in the Globe and Mail on August 12, 2014
By Christopher Ragan
Christopher Ragan is an associate professor of economics at McGill University and a Research Fellow at the C.D. Howe Institute. His latest publication is What Now? Addressing the Burden of Canada’s Slow-Growth Recovery.
Canada is mired in a slow-growth recovery because the United States and Europe are still repairing their economies in the wake of enormous financial crises. As I argue in a recently released paper from the C.D. Howe Institute, as long as the global economy remains fragile, Canada will not return to growth rates anywhere near our pre-crisis standard of 3 per cent.
Much research…
What Now? Addressing the Burden of Canada’s Slow-Growth Recovery
The Canadian economy continues to face serious macroeconomic challenges, the most important of which is addressing the burden of a slow-growth recovery, according to a report from the C.D. Howe Institute. In “What Now? Addressing the Burden of Canada’s Slow-Growth Recovery”, McGill University economist Christopher Ragan calls for Canadian policy makers to accept the likelihood […] Monetary Policy Council Urges Bank Of Canada To Hold Overnight Rate At 1.00 Percent At Next Setting; Looks For 1.25 By April 2015
April 10, 2014 — The C.D. Howe Institute’s Monetary Policy Council (MPC) today recommended that the Bank of Canada keep its target for the overnight rate, the very short-term interest rate it targets for monetary policy purposes, at 1.00 percent at its next announcement on April 16, 2014.…The Ill Wind that Blows from Europe: Implications for Canada’s Economy
The continuing possibility that things could take a turn for the worse in the eurozone ought to be a concern for Canadian policymakers, according to a report released today by the C.D. Howe Institute. In “The Ill Wind that Blows from Europe: Implications for Canada’s Economy,” author Pierre Siklos explores the linkages between the Canadian […] C.D. Howe Institute’s Monetary Policy Council Urges Bank Of Canada To Hold Overnight Rate At 1.00 Percent
February 27, 2014 — The C.D. Howe Institute’s Monetary Policy Council (MPC) today recommended that the Bank of Canada keep its target for the overnight rate, the very short-term interest rate it targets for monetary policy purposes, at 1.00 percent at its next announcement on March 5, 2014…Understanding the crucial link between money supply and inflation: Globe & Mail Economy Lab
Published in the Globe and Mail on February 18, 2014
By Christopher Ragan
My students are often puzzled about the causes of inflation, the relationship between it and “money,” and the concerns over very low inflation. These questions also arise in current public debate. So here are a few pointers on these central macroeconomic topics.
Suppose you collect data from a large group of countries over 30 years. For each country, you measure the average annual inflation rate and the average annual growth rate of the “money supply,” which includes the physical currency in circulation and the total value of bank deposits. You then have a single data point for each country, showing that country’s inflation-money growth…
Price-Level Targeting: A Post-Mortem?
While the Bank of Canada has quietly shelved consideration of moving to price-level targeting as a basis for monetary policy, the merits of this approach remain strong, according to a report released today by the C.D. Howe Institute. In “Price-Level Targeting: A Post-Mortem?” author Steve Ambler finds price-level targeting has convincing advantages over inflation-targeting, especially […] Bernanke-to-Yellen handoff: The right central banker for the times: Globe & Mail Op-Ed
Published in the Globe & Mail on January 21, 2014
By Christopher Ragan
Next week, Ben Bernanke will step down as chairman of the U.S. Federal Reserve Board, to be succeeded by Janet Yellen. Although it’s easy to be pessimistic about the U.S. government’s ability to make important decisions, we should all cheer that system’s ability to select its monetary policy leaders. Mr. Bernanke was the perfect choice for the past eight years; Ms. Yellen is an equally appropriate choice for the next four.
The global financial crisis ushered in the world’s deepest and most synchronized recession in more than 60 years. But it was no “normal” recession. People who read their economic history know that financial crises…