Exchanges and financial institutions are consolidating, and new financial instruments are constantly being developed. All of this is changing the way that global markets operate, with important implications for the competitiveness and efficiency of Canadian markets and institutions. Today, I want to talk about how Canada has been responding to these developments.
It is also not straightforward to account for this in forecasts of inflation. However, from a policy point of view, the inflation target is sufficiently flexible to accommodate the bias, given its relatively small size. [2] Going forward, the ABS will update the expenditure shares annually, rather than every five or six years. This will reduce substitution bias in the measured CPI.