Inflation targets

• Limited Commitment, Endogenous Credibility and the Challenges of Price-level Targeting

  Staff Working Paper 2018-61 Gino Cateau, Malik Shukayev

  This paper studies the cost of limited commitment when a central bank has the discretion to adjust policy whenever the costs of honoring its past commitments become high. Specifically, we consider a central bank that seeks to implement optimal policy in a New Keynesian model by committing to a price-level target path.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Inflation targets, Monetary policy framework JEL Code(s): E, E3, E31, E5, E52

• Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada

  Staff Discussion Paper 2018-18 Thomas J. Carter, Rhys R. Mendes, Lawrence L. Schembri

  In 1991, Canada became the second country to adopt an inflation target as a central pillar of its monetary policy framework. The regime has proven much more successful than initially expected, both in achieving price stability and in stabilizing the real economy against a wide range of shocks.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Credibility, Inflation targets, Monetary policy, Monetary policy framework JEL Code(s): E, E5, E52, E58, E6, E61
• November 20, 2018

  Choosing the Best Monetary Policy Framework for Canada

  Remarks Carolyn A. Wilkins McGill University Max Bell School of Public Policy Montréal, Quebec

  Senior Deputy Governor Carolyn A. Wilkins discusses public policy issues around monetary policy frameworks and how those issues have become more complex in the post-global financial crisis world.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Central bank research, Fiscal policy, Inflation and prices, Inflation targets, Interest rates, Monetary policy framework

• Evaluating the Bank of Canada Staff Economic Projections Using a New Database of Real-Time Data and Forecasts

  Staff Working Paper 2018-52 Julien Champagne, Guillaume Poulin-Bellisle, Rodrigo Sekkel

  We present a novel database of real-time data and forecasts from the Bank of Canada’s staff economic projections. We then provide a forecast evaluation for GDP growth and CPI inflation since 1982: we compare the staff forecasts with those from commonly used time-series models estimated with real-time data and with forecasts from other professional forecasters and provide standard bias tests.

  Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Economic models, Inflation targets, Monetary policy JEL Code(s): C, C3, C32, E, E1, E17, E3, E37
• September 8, 2018

  Investing in Monetary Policy Independence in a Small Open Economy

  Remarks Stephen S. Poloz, Césaire Meh Monetary Policy Spillovers in a Financially Integrated World Copenhagen, Denmark

  Governor Poloz discusses policies that can help central banks keep the ability to pursue independent monetary policy in a financially integrated global economy.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Fiscal policy, Inflation targets, International topics, Monetary policy, Monetary policy implementation
• September 6, 2018

  An Update on Canada’s Economic Resilience

  Remarks Carolyn A. Wilkins Saskatchewan Trade & Export Partnership Regina, Saskatchewan

  Senior Deputy Governor Wilkins discusses economic developments since the July Monetary Policy Report and Governing Council’s deliberations leading to yesterday’s policy rate decision.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Economic models, Inflation targets, Interest rates, Monetary policy, Monetary policy and uncertainty, Recent economic and financial developments, Trade integration
• June 27, 2018

  Let Me Be Clear: From Transparency to Trust and Understanding

  Remarks Stephen S. Poloz Greater Victoria Chamber of Commerce Victoria, British Columbia

  Governor Poloz talks about how the Bank is improving communications with the public and helping financial markets understand its monetary policy approach.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Credibility, Financial markets, Inflation targets, Monetary policy, Monetary policy and uncertainty, Recent economic and financial developments
• May 16, 2018

  The (Mostly) Long and Short of Potential Output

  Remarks Lawrence L. Schembri Ottawa Economics Association and CFA Society Ottawa Ottawa, Ontario

  Deputy Governor Lawrence Schembri discusses the importance of potential output to monetary policy, as well as policy challenges and opportunities in a world of low potential output growth.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Inflation targets, Interest rates, Labour markets, Monetary policy, Monetary policy framework, Potential output, Productivity

• Could a Higher Inflation Target Enhance Macroeconomic Stability?

  Staff Working Paper 2018-17 José Dorich, Nicholas Labelle, Vadym Lepetyuk, Rhys R. Mendes

  Recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent. We evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the Canadian economy.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Inflation targets, Monetary policy framework JEL Code(s): E, E3, E32, E37, E4, E43, E5, E52
• February 15, 2018

  Anchoring Expectations: Canada’s Approach to Price Stability

  Remarks Lawrence L. Schembri Manitoba Association for Business Economists Winnipeg, Manitoba

  Deputy Governor Lawrence Schembri examines the success of the Bank’s monetary policy framework and explains the review being undertaken before its renewal in 2021.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Central bank research, Credibility, Fiscal policy, Inflation and prices, Inflation targets, Monetary policy framework