Since the financial crisis, monetary policy has been strikingly different in Canada and the U.S. The first chart shows overnight nominal interest rates - the overnight money market rate in Canada and fed funds rate in the U.S.
So, since the end of 2007, the Bank of Canada has increased the size of its balance sheet by a small amount, and lengthened the maturity of its government securities, also by a very small amount. There's really not much going on relative to the large QE intervention that occurred in the U.S., which included the purchase of a large quantity of asset-backed securities. Thus, the conventional view, given the currently higher overnight nominal interest rate in Canada, would be that Canadian monetary policy is substantially tighter than in the U.S. So, if I were a strong believer in the persistent real effects of monetary policy, if I thought that lower nominal interest rates meant higher inflation, and if I think that QE works as advertised, I might think that: (i) real economic activity should be depressed in Canada relative to the U.S., and (ii) inflation should be lower in Canada than in the the U.S. Is that what happened? First, real GDP:
So, if you were to ask your average macroeconomist to back out monetary policy in Canada and the U.S. by looking at the last two charts, that person might tell you that it was about the same. But we know it wasn't.
I have seen a lot of stories recently about the effects of monetary policy on asset prices - bubbly talk, basically. If we take those stories seriously, we might expect to see more asset value appreciation in the U.S. than in Canada. In the stock market, that is certainly the case. The next chart shows the S&P 500 index, and a comparable measure for Canada.
So, maybe monetary policy - conventional or unconventional - isn't as big a deal as some people think it is.