“Reasonable price stability” was touted as a preferred policy objective by the Economic Council of Canada, and “inflation-unemployment trade-off zones” were dutifully reproduced in many of its publications.18 Another development during this period is also worth noting. It concerns the clarification of the roles and responsibilities of the government and the Bank of Canada with regard to monetary policy.
Louis Rasminsky, who had succeeded James Coyne as Governor in May 1961, had insisted as a condition of his appointment that the government’s powers regarding monetary policy be clearly defined.19 The Bank of Canada Act was amended in 1967 to allow the government to issue a directive to the Bank in the event there was a serious disagreement over the conduct of monetary policy.