With all the structural changes that have taken place in Canada and around the world in recent years, one important issue will be to gauge just how rapidly our economy can grow on a sustainable basis -- that is, without generating inflation pressures -- and what this implies for the employment picture in Canada.
The challenge for monetary policy at that stage will be how best to deal with the uncertainty surrounding estimates of the economy’s potential to produce. The conduct of monetary policy through the economic upswing and then under conditions of full capacity are the two topics I would like to discuss with you today.