4  In the price-level-target approach to inflation control, bygones are not bygones, unlike the current policy. Under price-level targeting, if inflation has been below trend, causing the price level to fall below target, monetary policy would need to generate above-trend inflation for a while to return the price level to target.
Or, if inflation has been above trend, lifting the price level above its target, the central bank would need to temporarily induce below-trend inflation to return the price level to its target path over time. 5  See various articles, Bank of Canada Review (Ottawa: Bank of Canada, Spring 2009).