With rising inflation top-of-mind for Canadians, a major question is: Can we predict its future? This Commentary shows that growth in the money supply is a useful predictor of inflation, and examines why and when.Since the early 1990s, the Bank of Canada has pursued a successful...

The Bank of Canada’s balance sheet has undergone a radical transformation since the beginning of the pandemic. The Bank’s total assets more than quadrupled at their peak and still remain 3.5 times higher. The most radical change on the liabilities side has been the increase in settlement...

This paper sets out to investigate two issues: first, it briefly provides a retrospective look at whether the stance of monetary policy was appropriate for hitting the Bank of Canada’s inflation target during 2018 and 2019, and second, it examines how to determine in real time whether monetary...

Canada is on the cusp of a new chapter in its monetary history. The emergence of crypto assets like Bitcoin and stablecoins, such as Facebook’s Diem, offer the promise of major gains in the efficiency and safety with which Canadians pay for goods and services and invest their savings. But a...

The surge of inflation as economies recovered from the COVID lockdowns of 2020 and 2021 took central bankers and most other observers by surprise. Canada was no exception. Year-over-year CPI inflation rose from -0.4 percent at its nadir in May 2020, to a peak of 8.1 percent in June 2022 before...