And the flipside of more central bank independence is more transparency and central bank accountability. At roughly the same time, the advent of inflation targeting acted as a catalyst for enhanced transparency and communication. It was increasingly recognised that having a clear monetary policy objective was making monetary policy more credible and helped anchor inflation expectations.
Looking back on developments to date, last week’s publication of Canada’s National Accounts for the third quarter of 2020 confirmed our expectation that a sharp rebound would take place as the economy reopened, following the precipitous decline in activity in the second quarter.