Those who look at the written version of my remarks will notice more footnotes than usual—a testament to the depth of good work in this area. What about renovating the current framework?
For over two decades, Canada’s monetary policy framework has centred on an inflation target of 2 per cent—within a control band of 1 to 3 per cent—and a floating exchange rate.10 The control band is there because inflation fluctuates in response to temporary factors, such as changes in gasoline prices, that don’t warrant a monetary policy response.