The Costs of Inflexible Indexing: Avoiding the Adverse Fiscal Impacts of Lower Inflation

Philippe Bergevin and William Robson
Additional contact information
Philippe Bergevin: C.D. Howe Institute

C.D. Howe Institute Commentary, 2011, issue 322

Abstract: A lively debate is underway about replacing Canada’s 2 percent inflation target with a target for lower inflation or a target for the price level itself when Canada’s inflation-control arrangement expires at the end of 2011. Either change could reduce uncertainty about changes in the value of money over time, and potentially stabilize the economy as well. But such policies may involve costs; a long-standing concern is that rises versus falls in the price level may have different or asymmetrical impacts on the economy.

Keywords: monetary policy; Consumer Price Index (CPI); Bank of Canada; inflation control (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 E64 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.cdhowe.org/public-policy-research/cost ... acts-lower-inflation (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdh:commen:322

Access Statistics for this article

More articles in C.D. Howe Institute Commentary from C.D. Howe Institute Contact information at EDIRC.
Bibliographic data for series maintained by Kristine Gray ().