But at a minimum, we can conduct monetary policy so that the economic ups and downs are not exaggerated, and in fact smoothed out. Again, experience has taught us that a policy of low and stable inflation works best to stabilize the economy in the short run.
In turn, this has helped households and firms make spending and investment decisions with more confidence, encouraged investment, contributed to sustained growth in output and productivity, and improved Canada’s standard of living. As is the case at every renewal, a great deal of research and analysis went into the process, and we took on board the experiences and lessons of the past five years.