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Welcome Folks,
Here, we are presenting small diving in the sea of Canada's Monetary policy. On this wall we include interesting videos, images and websites which helpful to understand how monetary policy affect on other sectors like economic growth in Canada.

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Video # 1 How can Monetary Policy be Created? Which factors are to be considered to frame Monetary policy?

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Video # 1 How can Monetary Policy be Created? Which factors are to be considered to frame Monetary policy?

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This video reflect about how monetary policy works in the economy. In this video Lorrie explains about factors affecting the monetary policy and results of that policy affect all Canadian peoples. Basically Inflation, Demand and supply of country that is import and export is considering while making policy. As a results monetary policy influences Car loans, Mortgage Loans and Business Loans. Economist forecast policy rate based on current economy. The currency exchange of country that is Canadian dollars also influence by its monetary policy. Economic growth and trade of balance (Import=Export) helps to raise the value of currency. After of all it gives overview about transmission of monetary policy.

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Monetary policy affects all Canadians. To conduct monetary policy, the Bank's Governing Council assesses diverse relevant information and comprehensive analysis and then applies its judgment. This video describes, in general terms, the "transmission" of monetary policy-i.e., how changes in the Bank's policy typically affect the economy and inflation over time.

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The Transmission of Monetary Policy - Whiteboard

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Monetary policy affects all Canadians. To conduct monetary policy, the Bank's Governing Council assesses diverse relevant information and comprehensive analysis and then applies its judgment. This video describes, in general terms, the "transmission" of monetary policy-i.e., how changes in the Bank's policy typically affect the economy and inflation over time.

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Image#1 Transmission process of Monetary Policy

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Image#1 Transmission process of Monetary Policy

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This Image shows step by step process of transmission of monetary policy. Bank of Canada forecast or assume the targeted interest rate which would be exchange rate and Long-term interest rates. Government collects data of available capital and total expenditure of year and based on that find out demand and predict inflation situation in country.

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monetary policy of canada - Google Search

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Website # 1 Details about Canada's Monetary Policy

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Website # 1 Details about Canada's Monetary Policy

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This website addresses objective of monetary policy. It includes that monetary policy is mainly depends on inflation, so keeping low inflation rate they can increase value of money. Bank of Canada tries to keep inflation rate law so that they can predict for next following years and focuses on their economic growth. Monetary policy consists of 2 key components that is inflation-control target and flexible exchange rate.

We select this website because it explains in-depth objective of monetary policy. It explains 2 types of rate which helps me to get knowledge about how interest rates of car, housing and loans are decided.

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Learn about the objective of Canada's monetary policy and the main instruments used to implement it: the inflation-control target and the flexible exchange rate. See also how monetary policy works, how decisions are made and read related backgrounders.

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Video # 2 How Currency exchange rate is to be affected by Monetary policy?

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Video # 2 How Currency exchange rate is to be affected by Monetary policy?

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This video explains about how monetary policy affect the currency exchange rate compare to US. The currency exchange rate affects by the high rate of exports business which helps to reduce inflation rate, so Bank of Canada reduce their rate and it results into raising value of Canadian dollar.

We select this video because it explains properly how currency rate affected. Here they provide comparison between US and Canadian dollar exchange rate which is lag. It is depending on infrastructure, Purchase power parity, employment and power source. By watching this video now We can easily relates with currency exchange rate and factors affecting the economic growth.

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Canadian dollar will continue to lag the U.S. dollar: Market strategist

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Karl Schamotta, chief market strategist at Cambridge Global Payments, joins BNN Bloomberg to provide perspective on the implications of the Bank of Canada's latest rate hike, his monetary policy outlook and what it all means for the Canadian dollar.

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This image indicates goals of monetary policy. Basically, Monetary policy covers all area which relates to economic growth. It focuses on those factors which are directly and indirectly affect the trades and financial growth of country. We choose this image because it shows which area would be affected by policy like employment, Foreign exchange market.

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currency exchange and monetary policy of canada - Google Search

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Video # 3 Effect of raised Interest Rate

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Video # 3 Effect of raised Interest Rate

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This video narrates about Bank of Canada raised up interest rate. The effect of that decision influence the consumer budget because high depression in energy sector. The economy of Canada builds up by raising up wage rate and high employment by tax cuts and government savings. He explained that international trade and exports hike up inflation rate which creates high price of commodity.

We select this video because it explains well that increase interest causes high price of commodity and raising up price of housings which become more costlier for consumers. The low value of currency creates more inflation. Consumers can not afford for their necessities like house because of high interest rate of housing loans.

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Bank of Canada discusses raised interest rate of 1.75%

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Website # 2 Demographic factors affect monetary policy

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Website # 2 Demographic factors affect monetary policy

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This website explains about demographic factors such as age, income. The effect of monetary policy is also influence by age of the population available in the country. As old age group of people increases it puts more burden on government while on other hand younger group generates more income for government by investing.

We choose this website because it explains how the age group of population affect that country’s economy. The high number of younger generates more income by investing and exporting. The money fluctuation is important for economic growth of company. Reversely old age people keep their money with their so supply of money in the market imbalance and interest rate goes high.

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flickr/Bart Heird

Since 2008, the Federal Reserve has kept interest rates pinned at zero, maxing out its main policy tool for stimulating the American economy following the worst recession in 80 years.

Given the disappointing nature of the recovery since then, the central bank has added unconventional monetary policy tools to the mix - foremost among them a balance-sheet expansion fueled by government bond purchases known as quantitative easing - in a bid to provide the economy with further stimulus.

Yet the effectiveness of these efforts, too, has been deemed questionable - despite several years and several trillions of dollars of bond buying, unemployment remains high and inflation remains below target - and now, the Fed is moving toward winding down quantitative easing altogether.

The reality, though, is that the effectiveness of monetary policy has actually been in decline for a long time.

Part of the reason for this decline, according to a new research paper published by the International Monetary Fund: aging in advanced economies around the world.

In the paper - titled " Shock from Graying: Is the Demographic Shift Weakening Monetary Policy Effectiveness" - IMF economist Patrick Imam links aging populations in countries like the U.S., U.K., Japan, Germany, and Canada to empirical evidence that monetary policy has become less effective.

"Based on the life-cycle hypothesis, we would expect older societies to typically have a large share of households that are creditors, and to be less sensitive to interest rate changes, while younger societies would typically have a larger share of debtors with higher sensitivities to monetary policy," says Imam.

And "with fertility rates plummeting around the world-often below replacement rate-including in low-income countries," the IMF economist writes, "the world is going through an unprecedented demographic shift that is leading to a rapidly graying world."

The paper seeks to test how much of the decline in monetary-policy effectiveness can be attributed to aging.

"The results reveal that a graying society, as measured by the old-age dependency ratio, exerts a negative (in absolute terms) statistically significant long-run impact on the effectiveness of monetary policy," Imam finds. "All else being equal, an increase in the old-age dependency ratio of one point lowers (in absolute terms) the cumulative impact of a monetary policy shock on inflation and unemployment by 0.10 percentage points and 0.35 percentage points, respectively."

In other words, as the old-age dependency ratio (the ratio of those in the population 65 and older to those between 15 and 64 years of age) rises, a change in policy rates by the central bank has less and less of an effect on unemployment and inflation rates.

"These estimates thus imply, when taken at face value, quite a strong negative long-run effect of the ageing of the population on the effectiveness of monetary policy," says Imam. "This is particularly significant when linked to, for instance, the projected 10 point rise in the old-age dependency ratio in Germany over the next decade."

This leads the IMF economist to a few conclusions, two of which we highlight here (emphasis added):

More aggressive monetary policy needed: If monetary policy is less effective in a graying society, ceteris paribus, a larger change in the policy rate will be needed to bring about a change in the economy than in a younger society. This implies that traditional changes of 25 [basis points], which have been the norm in previous decades, may have to be amplified. Monetary policy will have to become more "activist" in ageing societies, with higher variation in interest rates possible going forward.

Increasing importance of other policy tools to stabilize the economy: Monetary policy is a key tool of policymakers to stabilize the economy, and has proven to be a powerful weapon during the global crisis. If graying societies are a reason for monetary effectiveness becoming less potent, the burden to stabilize the economy and the financial system may increasingly be borne by other policy tools. With monetary policy effectiveness marginally reduced, the relative role of fiscal and macroprudential policy as a means to stabilize the economy may become more important.

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The Federal Reserve Has A Demographics Problem - An Aging Society Is Making Monetary Policy Less Effective

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Since 2008, the Federal Reserve has kept interest rates pinned at zero, maxing out its main policy tool for stimulating the American economy following the worst recession in 80 years.

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Video # 4 Trade Tariff and monetary policy

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Video # 4 Trade Tariff and monetary policy

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This video explains connection between international trade and country’s economic condition. The tariff treatments which means two or more countries agree to import and export of goods. US-Mexico and Canada trade agreement allows Canada to export more lumber which helps to make strong economy. The currency exchange rate between those countries affect the price of commodities. Canada could be making stronger economy because of free trade agreements.

I select this video because I am become familiar with consumer price index which include retail business with goods and services, economic growth, purchase power of consumer that is financial growth of country. I able to know that how trade agreements important for development of that country.

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Bank of Canada governor on rate hikes and trade tariffs

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Website # 3 Why Monetary policy matters?

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Website # 3 Why Monetary policy matters?

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This website includes the detail information about 2 key aspects that is inflation control target and flexible rates. It helps Central bank to maintain stable price and helps to take decision regarding interest rate. Canadian economy stuck between rock and hard place that is the growth of energy sector is low which impacts economic environment of Canada.

We select this website to understand the different types of rate which helps to create monetary policy. The non-monetary policy also affects the decision regarding monetary policy. Oil and other commodities price also affect the portfolio of economy. We are able to differentiate fiscal policy and monetary policy by reviewing this website.

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Pacific Investment Management Company LLC

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Canada's Monetary Policy Stuck Between a Rock and a Hard Place

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Understanding a central bank's reaction function to volatile financial and commodity markets can help investors navigate an uncertain environment.