High inflation rates, for example, disrupt this signalling and steering function of prices. Walter Eucken witnessed hyperinflation and the Great Depression for himself, and his experiences fed into his oeuvre. [2] He understood that a competitive order can only be made a reality if monetary stability is assured.
We can’t control or even influence the prices of most internationally traded goods. But if Canadians’ expectations of inflation stay anchored on the 2% target, inflation in Canada will come back down when global inflationary pressures from higher oil prices and clogged supply chains abate.