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The Roads Not Taken: Why the Bank of Canada Stayed With Inflation Targeting

Author

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  • Christopher Ragan

    (McGill University)

Abstract

Sticking with the status quo was only one option under debate among monetary experts in the lead-up to renewal of the Bank of Canada’s inflation-targeting mandate, which was announced this week. Several other routes were available. Two of them – namely, targeting nominal GDP or targeting full employment – were arguably non-starters. Two other approaches, however, held more promise: (i) moving to a price-level targeting regime, or (ii) sticking with inflation targeting but with a lower, say 1 percent, target. Nevertheless, the renewal of the status quo keeps in place a coherent monetary policy regime that has served Canadians well.

Suggested Citation

  • Christopher Ragan, 2011. "The Roads Not Taken: Why the Bank of Canada Stayed With Inflation Targeting," e-briefs 125, C.D. Howe Institute.
  • Handle: RePEc:cdh:ebrief:125
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    File URL: https://www.cdhowe.org/public-policy-research/roads-not-taken-why-bank-canada-stayed-inflation-targeting
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    References listed on IDEAS

    as
    1. Michael Parkin, 2009. "What is the Ideal Monetary Policy Regime? Improving the Bank of Canada's Inflation-targeting Program," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 279, January.
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    Cited by:

    1. Julian A. Parra-Polania & Luisa F. Acuña-Roa, 2013. "Price-Level Targeting: an omelette that requires breaking some Inflation-Targeting eggs?," BORRADORES DE ECONOMIA 010984, BANCO DE LA REPÚBLICA.

    More about this item

    Keywords

    Monetary Policy; Canada; Bank of Canada; inflation targeting;

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • 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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