Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada, gave a speech yesterday at noon. She said that the Bank of Canada had lowered its estimate of the (cyclically-adjusted) neutral rate of interest.
"All told, we think that the neutral rate of interest is lower than it was in the years leading up to the crisis because of these structural developments. We estimate that the real neutral policy rate is currently in the range of 1 to 2 per cent. This translates into a nominal neutral policy rate of 3 to 4 per cent, down from a range of 4 1/2 to 5 1/2 per cent in the period prior to the crisis."