The Globe and Mail reports in its Monday, Oct. 31, edition that last December, Bank of Canada Governor Tiff Macklem unveiled a new five-year agreement in which the central bank, while still focusing on its long-standing 2-per-cent inflation target, would also "actively seek the maximum sustainable level of employment." The Globe's David Parkinson writes that today, with the BOC willingly pushing the economy to the brink of recession as it raises rates sharply, Mr. Macklem last week found himself explaining why he seems prepared to sacrifice jobs in order to hammer 7-per-cent inflation back down to 2 per cent. Some folks wonders whether Mr. Macklem is shirking the "maximum sustainable employment" commitment. On Friday Mr. Macklem said: "What the 'sustainable' part means, really, is that it's the maximum level of employment that the economy can sustain without creating inflationary pressures. When we look at a broad range of labour-market indicators, virtually all of them suggest that we're operating above maximum sustainable employment -- and that's one of the factors that is driving prices up." The Globe says Mr. Macklem was clear from the start that price stability would always take precedent.
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