The associated business uncertainty became a factor that on its own weighed on economic growth by dampening business confidence, investment and exports.6 Forecasting the size and duration of the impact of this uncertainty, particularly given the on-again, off-again nature of trade talks and the unpredictable nature of the protagonists, required an enormous amount of judgment by policy-makers.
The development of a risk management approach In 2013, when I returned to the Bank, it was obvious that the Canadian and global economies were dealing with many uncertainties and risks that lay outside the scope of our main monetary policy models of the time. This represented a clear challenge for our monetary policy.