The Bank of Canada's Monetary Policy Framework
Takatoshi Ito, Brenda González‐Hermosillo
Abstract
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Takatoshi Ito, Brenda González‐Hermosillo
Abstract
Open-access reader
In recent years the Bank of Canada has made important changes in the way it conducts monetary policy. In particular, the bank has adopted explicit inflation targets and introduced significant changes to its operational framework designed to increase transparency and reduce market uncertainty. This paper examines the key issues associated with the recent changes in the Bank of Canada’s monetary policy framework and analyzes various indicators of central bank credibility.
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In recent years the Bank of Canada has made important changes in the way it conducts monetary policy. In particular, the bank has adopted explicit inflation targets and introduced significant changes to its operational framework designed to increase transparency and reduce market uncertainty. This paper examines the key issues associated with the recent changes in the Bank of Canada’s monetary policy framework and analyzes various indicators of central bank credibility.
Key concepts: Credibility, Monetary policy, Transparency (behavior), Inflation targeting, Central bank, Forward guidance, Chinese financial system, Monetary reform