Mandate uncertainty has decreased in Canada since the early 1990s, when the Bank and federal government first spelled out an agreement on a framework for inflation targeting containing an 2  Mendes, Murchison and Wilkins summarize and compare the main results that have emerged in the literature on optimal monetary policy under uncertainty with actual central bank behaviour in R. R. Mendes, S. Murchison and C. A. Wilkins, “Monetary Policy Under Uncertainty: Practice Versus Theory,” Bank of Canada Staff Discussion Paper No.
The European Commission expects euro area real GDP to shrink by 0.4% in 2013. And in 2014, growth may well amount to a mere 1.1%. This adds to the challenges facing bank balance sheets and public finances. So, is it all gloom and doom? Far from it, I would argue, as long as policy makers take the right steps.