The Globe and Mail reports in its Thursday edition that the Bank of Canada published a report on Wednesday that says most Canadians want it to stick with its existing inflation-targeting regime. The Globe's Mark Rendell writes that the report laid out findings from public consultations conducted over the past two years as part of a sweeping review of its mandate.
The BOC renews its monetary policy framework with the federal government every five years. The Globe says the BOC is now looking at alternative models, including a "dual mandate" that targets full employment alongside inflation, and an "average inflation" model, which would let inflation run above or below target to make up for past misses. This comes at a time when central banks around the world are assessing the effectiveness of their monetary policies in an ultralow interest rate world, while trying to trace a delicate path out of the pandemic and back to full-employment without triggering runaway inflation. The BOC is conducting a "horse race" pitting six monetary policy models against one another to see which does the best job guiding inflation and supporting financial stability while potentially meeting other goals like reducing inequality.
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