Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241087 
Year of Publication: 
2020
Series/Report no.: 
Bank of Canada Staff Discussion Paper No. 2020-11
Publisher: 
Bank of Canada, Ottawa
Abstract: 
For most of 2011-19, inflation in Canada and advanced economies registered below inflation targets. This has spurred a debate on whether "lowflation" is a temporary phenomenon or rather a sign of a fundamental change in inflation behaviour-in Canada and globally. So far, we know little. Global factors-changes in the price of oil and shifts in trade due to globalization-can only explain a portion of the fluctuations in domestic inflation. Emerging survey data are showing that inflation expectations of managers and households behave very differently from model expectations based on full information and rational behaviour. Recent surveys using randomized control trials reveal that changes in monetary or fiscal policies may lead to unexpected responses of inflation expectations and firm behaviour. Changes in the markets for consumer goods raise the need for us to rethink the methods for measuring inflation. We discuss the questions that these observations bring up for central bankers.
Subjects: 
Central bank research
Inflation and prices
Monetary policy
JEL: 
E31
E52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.