The onset of the pandemic saw a high degree of coordination between our monetary and fiscal authorities. The Bank of Canada lowered its overnight rate to its effective lower bound and engaged in quantitative easing, governments pumped in stimulus and support programs, and the Office of the...

As lender of last resort, the Bank of Canada has the responsibility of stepping in to provide liquidity in cases when markets require emergency funding. In crisis situations, a timely and effective response is imperative for avoiding systemic breakdowns. In this Commentary, I argue that in order...

The Bank of Canada should weigh how income inequality affects monetary policy effectiveness as it pursues its 2 percent inflation target, says a new report from the C.D. Howe Institute.In “Monetary Policy, Income Inequality, and Inflation — What's the Link?” authors Jeremy Kronick and...

We explore the effects of macroeconomic literacy training on expectation formation in an experimental economy where participants' aggregated expectations endogenously influence macroeconomic variables. We systematically vary the information participants receive about the economy's...

The effectiveness of monetary policy depends, to a large extent, on market expectations of its future actions. In a standard New Keynesian business-cycle model with rational expectations, systematic monetary policy reduces the variance of inflation and the output gap by at least two-thirds....

We develop an experimental production economy to study the general equilibrium and welfare effects of speculation and stabilization policies. Participants playing the role of household-investors interact in labor, output, and, in some treatments, asset markets. Without the ability to trade...