Canada deputy: Neutral rate of interest has dropped
Potential growth will be lower than before the crisis, warns Wilkins
Potential output growth in Canada and other industrialised economies will be lower than it was in the years leading up to the crisis, Bank of Canada (BoC) senior deputy governor Carolyn Wilkins said in a speech in Toronto yesterday, adding: "We also think that the neutral rate of interest is lower."
Wilkins said the central bank estimates that the neutral rate for Canada now stands at between 3% and 4%, down from a range of 4.5% to 5.5% in the mid-2000s.
"It is clear that continued monetary
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