The Bank of Canada is conducting extensive research into finding methodologies and tools to identify and measure systemic risk. While work in this area is extremely complex, the Bank has made substantial progress in recent years. We now have two state-of-the art models.
And we projected that with average annual real GDP growth of 2.2 per cent this year, the Canadian economy would move back down to its full production potential in the second half. Core inflation was projected to move down to 2 per cent in 2008, and total inflation was projected to return to target by mid-2008.