Oudiz and Sachs (1984) reinforced the case against coordination by simulating their state-of-the-art general equilibrium model and showing that, even if one picked the right model, the improvement, relative to proceeding independently, was very modest.5 It is important to note that all of these cautions came from the economics side.
Further, the Government and the Bank agree that because well-anchored inflation expectations are critical to achieving both price stability and maximum sustainable employment, the primary objective of monetary policy is to maintain low, stable inflation over time. This renewal of Canada’s monetary policy framework is occurring at a time when changes to the economy are complicating the task of monetary policy.