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Inflation targeting and monetary policy in Canada: What is the impact on inflation uncertainty?

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  • Miles, William

Abstract

Inflation uncertainty has been demonstrated both theoretically and empirically to lower real output. This paper examines the impact of inflation targeting in Canada on inflation uncertainty, as well as persistence. Our results indicate that inflation targeting lowered inflation persistence, but actually increased uncertainty. Such an effect may be due to the failure of the previous formal target, the M1 money supply, to successfully combat inflation.

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  • Miles, William, 2008. "Inflation targeting and monetary policy in Canada: What is the impact on inflation uncertainty?," The North American Journal of Economics and Finance, Elsevier, vol. 19(2), pages 235-248, August.
    • Handle: RePEc:eee:ecofin:v:19:y:2008:i:2:p:235-248
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    1. Huang, Ho-Chuan (River) & Yeh, Chih-Chuan, 2017. "Level, structure, and volatility of financial development and inflation targeting," Journal of Empirical Finance, Elsevier, vol. 44(C), pages 108-124.
    2. Bedri Kamil Onur Tas & Hasan Murat Ertugrul, 2013. "Effect of Inflation Targeting on Inflation Uncertainty: A SWARCH Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 444-459, December.
    3. Harold Glenn A. Valera & Mark J. Holmes & Gazi M. Hassan, 2018. "Is inflation targeting credible in Asia? A panel GARCH approach," Empirical Economics, Springer, vol. 54(2), pages 523-546, March.
    4. Huang, Ho-Chuan & Yeh, Chih-Chuan & Wang, Xiuhua, 2019. "Inflation targeting and output-inflation tradeoffs," Journal of International Money and Finance, Elsevier, vol. 96(C), pages 102-120.

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