The Bank of Canada's Monetary Policy Framework: Have Recent Changes Enhanced Central Bank Credibility?

ByTakatoshi Ito, Brenda Gonzalez-Hermosillo

December 1, 1997

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In recent years the Bank of Canada has made important changes in the way it conducts monetary policy. In particular, the bank has adopted explicit inflation targets and introduced significant changes to its operational framework designed to increase transparency and reduce market uncertainty. This paper examines the key issues associated with the recent changes in the Bank of Canada’s monetary policy framework and analyzes various indicators of central bank credibility.

Subject: Banking, Exchange rates, Financial services, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Prices, Short term interest rates, Yield curve

Keywords: central bank, decision-making process, Exchange rates, Global, Inflation, inflation expectation, inflation rate, Inflation Targeting, Monetary Policy, overnight rate, policy practice, rate of inflation, reaction function, Short term interest rates, trading range, WP, Yield curve

Pages:
20
Volume:
1997
DOI:
https://doi.org/10.5089/9781451858464.001
Issue:
171
Series:
Working Paper No. 1997/171
Stock No:
WPIEA1711997
ISBN:
9781451858464
ISSN:
1018-5941

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