1  BIS Review 32/2000  While we are certainly heartened by the better productivity outlook in Canada, we are not sure how large these gains are likely to be, how long they will last, or by how much they will eventually enhance our economy’s production capacity.
This uncertainty raises an important issue for monetary policy, especially since, by some measures, the Canadian economy is currently operating at or above full capacity. On the one hand, our low-inflation environment and the Bank of Canada’s commitment to maintaining it give us more room than we have had for some time to explore the economy’s full potential.