Of course the idea that a trade-off between employment and inflation exists was and still is a very tempting one to politicians. The so-called Phillips curve could then be interpreted as a menu card that allows politicians to choose whether they want to have high inflation or high unemployment.
One of these issues is what measure or measures we should use to gauge underlying inflationary pressures. The best-known measure, core inflation, is facing upward pressure because of the impact of the lower Canadian dollar on the prices of imported goods. As such, core inflation is overstating the underlying trend of inflation in the economy.