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Precision Targeting: The Economics – and Politics – of Improving Canada’s Inflation-Targeting Framework

Author

Listed:
  • Christopher Ragan

    (McGill University)

Abstract

The Bank of Canada’s inflation-targeting framework, since its inception in 1991, has proven itself a success. Yet further improvements in the system should be considered seriously for inclusion in a renewed monetary policy agreement, between the Bank of Canada and the federal government, and renewal is due in 2011. Some improvements would deliver genuine economic benefits to millions of Canadians over the years ahead. Lowering the target rate for consumer price inflation in particular would help secure the domestic purchasing power of our financial assets. Such a change, however, should be part of a coherent framework, which addresses financial stability goals and political imperatives.

Suggested Citation

  • Christopher Ragan, 2011. "Precision Targeting: The Economics – and Politics – of Improving Canada’s Inflation-Targeting Framework," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 321, February.
  • Handle: RePEc:cdh:commen:321
    as

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    File URL: https://www.cdhowe.org/public-policy-research/precision-targeting-economics-%E2%80%93-and-politics-%E2%80%93-improving-canada%E2%80%99s-inflation-targeting-framework
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Monetary Policy; Bank of Canada; inflation targeting; Statistics Canada; CPI; Ministry of Finance; Office of the Superintendent of Financial Institutions;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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