While this is a global phenomenon, it makes maintaining a sound framework for monetary policy in Canada all the more important. From a longer-term perspective, since the adoption of an inflation-targeting framework 30 years ago, consumer price index (CPI) inflation has averaged close to 2 percent, despite periods of both upward and downward pressures on inflation.
Here, I am referring to nominal rates, assuming inflation expectations are stable. 8 Richardson & Williams (2015) provide detail on estimation of the neutral interest rate. 9 For further detail on the definition of the neutral rate, see Chetwin & Wood (2013).