Core inflation at the Bank of Canada A critique

Kevin Clinton

No 273553, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: Core inflation is a useful concept for the theory and practice of monetary policy. The Bank of Canada maintains, in addition, that core inflation should be, and has in fact been, a useful predictor of headline inflation. Under the bank’s policy of inflation targeting, however, this is incorrect: over horizons of a year or more the best forecast should be the 2 percent target; and core inflation should have no predictive content. Post- 1995 evidence confirms this argument.

Keywords: Financial Economics; International Development (search for similar items in EconPapers)
Pages: 12
Date: 2006-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:273553

DOI: 10.22004/ag.econ.273553

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