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Room for Manoeuvre – Monetary Policy Over the Next Eighteen Months, and the Allure of Price-Level Targeting

Author

Listed:
  • Philippe Bergevin

    (C.D. Howe Institute)

  • David Laidler

    (C.D. Howe Institute)

Abstract

Moving to price-level targeting from inflation-rate targeting could be a sound option for the Bank of Canada after 2011, when its current agreement with the Minister of Finance is up for renewal. However, the authors say the viability of that option rests on whether the Bank can maintain its credibility in monetary policy over the coming months, as it seeks a balance between providing support to the still fragile economic recovery and avoiding a resurgence of inflation above its 2 percent inflation target.

Suggested Citation

  • Philippe Bergevin & David Laidler, 2010. "Room for Manoeuvre – Monetary Policy Over the Next Eighteen Months, and the Allure of Price-Level Targeting," e-briefs 97, C.D. Howe Institute.
  • Handle: RePEc:cdh:ebrief:97
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    File URL: https://www.cdhowe.org/public-policy-research/room-manoeuvre-monetary-policy-over-next-eighteen-months-and-allure-price-level-targeting
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    Cited by:

    1. Benjamin Dachis, 2010. "Picking up Savings: The Benefits of Competition in Municipal Waste Services," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 308, September.

    More about this item

    Keywords

    Monetary Policy; Bank of Canada; price-level targeting; inflation-rate targeting; exchange rate;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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