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Exploring the potential benefits of inflation overshooting

Author

Listed:
  • Robert Amano
  • Marc-André Gosselin
  • Kurt See

Abstract

After a period with the interest rate at the effective lower bound, temporarily overshooting inflation may offer important economic benefits. This may be especially true for vulnerable segments of the population, such as workers with low attachment to the labour force and the long-term unemployed.

Suggested Citation

  • Robert Amano & Marc-André Gosselin & Kurt See, 2021. "Exploring the potential benefits of inflation overshooting," Staff Analytical Notes 2021-16, Bank of Canada.
  • Handle: RePEc:bca:bocsan:21-16
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    References listed on IDEAS

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    More about this item

    Keywords

    Inflation targets; monetary policy; monetary policy framework; and labour markets;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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