Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123489
Authors: 
Laidler, David
Year of Publication: 
2015
Series/Report no.: 
EPRI Working Paper 2015-1
Abstract: 
In Canada, targeting the inflation rate was intended as a temporary measure on a journey to price-level stability, but became a well-established monetary policy regime in its own right. This paper analyses the role of the interaction of economic ideas with the experience generated by their application to policy in bringing about this outcome. In the following account, changing beliefs about the stability or otherwise of ongoing inflation, the capacity of a flexible exchange rate to create a vicious circle of depreciation and rising domestic prices, and about the roles played by the natural unemployment rate and money growth in influencing economic outcomes are emphasised. Today's standard DSGE approach to modelling inflation targeting arrived on the scene only after the Canadian regime was well established.
Subjects: 
money
monetary policy
inflation
inflation-targeting
interest rates
unemployment
exchange rate
JEL: 
B2
E5
Document Type: 
Working Paper

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