National and Provincial Inflation in Canada: Experiences under Inflation Targeting

Graham Voss and Maxym Chaban

No 1201, Department Discussion Papers from Department of Economics, University of Victoria

Abstract: We examine the behaviour of national and provincial inflation in Canada under inflation targeting to determine the extent to which the inflation targeting regime adopted by the Bank of Canada in the 1990s has anchored inflation expectations. Inflation expectations are well anchored when there are no predictable departures of inflation from target at sufficiently distant horizons. To examine this condition, we consider the out of sample prediction of monthly inflation with specific focus on whether deviations from the 1-3% target band are consistently predictable. We find support for well anchored inflation expectations at the national level and some but not all provinces.

Keywords: Inflation; monetary policy; inflation targeting; forecasting (search for similar items in EconPapers)
JEL-codes: E31 E58 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2012-04-13
New Economics Papers: this item is included in nep-cba, nep-for, nep-mac and nep-mon
Note: ISSN 1914-2838
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vic:vicddp:1201

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