Canada was an early adopter of inflation targeting as an approach to improving monetary policy outcomes. Prior to the introduction of inflation targeting, the Bank of Canada and other central banks around the world experimented with a number of ways to provide economic and price stability, such as fixed exchange rates and controlling the supply of money.
But a period of high and volatile inflation through the 1970s and early 1980s prompted central bankers and other economists to search for a better approach. In Canada, for example, between 1974 and 1981, inflation started at 12%, dropped below 6%, then shot back up to more than 12%.