3 What needs to be brought back My final reflection on monetary policy after the Great Recession is that some of what was old in central banking is new again. When I first started working at the Bank of Canada in 1984, research was focusing not on inflation targeting, but on finding a monetary aggregate to target.
In 1981 the Bank abandoned the M1 target – or, as Governor Bouey quipped – “M1 abandoned us”. And subsequently, much of the research at the Bank was aimed at finding a new M with a stable relationship with prices, income, and interest rates.