Core inflation at the Bank of Canada: A critique
AbstractCore inflation is a useful concept for the theory and practice of monetary policy. The Bank of Canada maintains, in addition, that core inflation should be, and has in fact been, a useful predictor of headline inflation. Under the bank's policy of inflation targeting, however, this is incorrect: over horizons of a year or more the best forecast should be the 2 percent target; and core inflation should have no predictive content. Post-1995 evidence confirms this argument.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1077.
Length: 10 pages
Date of creation: May 2006
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-CBA-2006-06-11 (Central Banking)
- NEP-FOR-2006-06-22 (Forecasting)
- NEP-MAC-2006-06-15 (Macroeconomics)
- NEP-MON-2006-06-10 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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