Seen in this light, the focus on low inflation is not an end in itself, but rather a means to an end – the end being the advancement of the economic well-being of Canadians. Of course, a low-inflation policy by itself is not sufficient to guarantee the best economic outcome for Canada.
Fiscal prudence and other policies that aim to improve the structure and flexibility of the economy are also essential. But low inflation provides a crucial underpinning to a well-functioning economy. If the goal of monetary policy is to achieve and preserve low inflation, how would the central bank go about it?