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Recent Evidence on the Resiliency of Flexible Inflation Targeting

Author

Listed:
  • Edoardo Briganti
  • Wei Dong
  • Olena Kostyshyna
  • Soyoung Lee
  • Florent Samson
  • Rodrigo Sekkel

Abstract

This paper assesses the resilience of flexible inflation targeting in the presence of large and persistent supply shocks. Evidence from Canada’s post pandemic experience, new macroeconomic experiments, and policy changes at the Reserve Bank of New Zealand shows that flexible inflation targeting remains a robust framework provided that credibility is preserved. Timely policy action and clear communication are critical for anchoring inflation expectations and sustaining policy flexibility.

Suggested Citation

  • Edoardo Briganti & Wei Dong & Olena Kostyshyna & Soyoung Lee & Florent Samson & Rodrigo Sekkel, 2026. "Recent Evidence on the Resiliency of Flexible Inflation Targeting," Staff Analytical Papers 2026-23, Bank of Canada.
    • Handle: RePEc:bca:bocsap:26-23
    DOI: 10.34989/sap-2026-23
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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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