Horgonyozatlan Inflációs Várakozások.pdf

Lawrence Schembri, Deputy Governor of the Bank of Canada, discusses the country's approach to price stability, which is the cornerstone of monetary policy frameworks worldwide. The Bank of Canada's mandate is to promote economic and financial welfare, and it believes that inflation control is key to achieving this goal. The current framework, established in 1991, consists of an explicit inflation target and a flexible exchange rate, with a focal point of 2% inflation. Schembri attributes the framework's credibility and success to three factors: a clear and simple inflation target, political legitimacy, and a formal review process. He reviews the history of inflation control, including the search for a nominal anchor, and discusses the adoption of inflation targeting in Canada in 1991. Schembri also touches on the impact of the policy on inflation and the unique process followed to ensure its effectiveness, with the goal of strengthening the framework to manage potential risks to the Canadian economy.