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The C.D. Howe Institute’s toolkit for tracking the economy is a customized series of data sets from past Institute publications. These tools can be helpful for policymakers and other parties interested in analyzing monetary policy and financial stability decisions.

These unique variables, which can all be found in past Institute work, include:

  1. The Leading Economic Activity Index: using various leading economic indicators, this index anticipates periods of economic stress for Canada and is based on freely available, downloadable data;
  2. The Vulnerability Barometer: tracks vulnerabilities across the banking, corporate, household, and housing sectors – a higher score means increased vulnerability;
  3. The Diffusion Index: conveys in a single number the extent to which the ups and downs of an economy are widespread by industry in any given period – where 50 can be thought of as an economy with the same number of industries expanding and contracting;
  4. The Money Overhang Index: tracks the gap between broad money trend growth (M2++) and trend inflation, and where a higher gap, if driven by shocks to money growth, means inflation will have to play catch up (with the opposite true as well); 
  5. The Monetary Policy Tightness/Looseness Indicator: estimates a range of where the overnight rate might have been expected to sit based on different versions of the Taylor rule; and
  6. Supply/Demand Contributions to Inflation: measures product-level price changes and empirically identifies whether they have been mainly supply driven (that is, by energy prices, wages or other input costs) or demand driven (by consumer expenditures, fiscal policy and so on), aggregating them across each category (supply, demand, ambiguous).

Figure 1: C.D. Howe Institute's Leading Economic Activity Index (2002=100), Jan.1992 - April 2024


Figure 2: Vulnerability Barometer – 1990Q1 – 2023Q4


Figure 3: Diffusion Index – Feb. 2007 – March 2024

 Diffusion Index

Figure 4: Money Overhang Index – Jan. 1996 – March 2024

Money Overhang

Figure 5a: Taylor Rule Range Indicator – Integrated Output Gap, Jan. 1996 – Dec. 2023


Figure 5b: Taylor Rule Range Indicator – Unemployment Rate, Jan. 1996 – April 2024


Figure 6: Contribution of Supply and Demand to Annual Price Changes in the Personal Consumption Expenditure Index, Canada, 2010:Q1 – 2024:Q1