How effective is unconventional monetary policy in Canada?

michal2By Michal Ksawery Popiel, JDI Student Fellow, Queen’s University

In normal times, the Bank of Canada stimulates the economy by lowering the target for the overnight interest rate, encouraging borrowing and spending. However, interest rate movements are restricted below by an effective lower bound (ELB) — a point at which investors would withdraw their money from banks because they prefer to hold cash for a return of 0 percent. Once it is reached, central banks must turn to other, unconventional measures to influence economic conditions.Read More »

Search, Monetary Theory, Policy and Housing Economics

amyAmy Sun, the 2014 Queen’s Economics Department Faculty Research Prize recipient, uses Search Theory to give insight into economic policy. The following article was originally published in the QED alumni newsletter. 

By Amy Sun, Queen’s University

Classical economic theory treats the transaction process as an instantaneous step. Experience from the real world, however, suggests that in many contexts this simplification is too much of an abstraction from reality.Read More »