Friedman, M (1953): “The Case for Flexible Exchange Rates”, in Essays in Positive Economics, University of Chicago Press, Chicago, pp 157-203. See, for example, “A Method of Combining a Free Exchange Rate With the Present System of Exchange Control in Canada”, Memorandum, 31 January 1949, Bank of Canada Archives. BIS Review 90/2000  4  domestic rate of inflation.
Canada had experienced a sharp escalation in consumer prices during the Korean War, and inflationary pressures had persisted for some time after. While domestic spending had faltered in 1954, the subsequent recovery pushed inflation well above the level that the Bank implicitly associated with price stability.