More research will be needed to understand these differences. 2 The Bank's successful use of core CPIX has helped anchor Canadian inflation expectations which, in turn, has helped dampen movements in total inflation. If households and businesses are convinced that inflation will soon return to 2 per cent, they are less likely to form extrapolative expectations based on movements in current headline inflation.
Consequently, they are less likely to push prices higher or lower. This self-reinforcing cycle makes the Bank of Canada's job much easier and is clearly beneficial for the economy as a whole.