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Flexible Inflation Forecast Targeting: Evidence from Canada

Graham Voss () and Glenn D. Otto

No 1101, Department Discussion Papers from Department of Economics, University of Victoria

Abstract: We examine models of flexible inflation forecast targeting. The target criteria from these models restrict the conditionally expected paths of inflation and output targeted by the central bank. We estimate and test these criteria for Canada, an early adopter of inflation targeting. We show that the Bank of Canada systematically balances inflation and economic activity over the medium term policy horizon consistent with flexible inflation targeting. Further, our results establish the usefulness of flexible inflation targeting rules as an alternative to standard Taylor rules.

Keywords: monetary policy; inflation; flexible inflation targeting (search for similar items in EconPapers)
JEL-codes: E31 E58 (search for similar items in EconPapers)
Date: 2011-11-30
Note: ISSN 1914-2838
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Journal Article: Flexible inflation forecast targeting: Evidence from Canada (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:vic:vicddp:1101

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