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June 22, 2021

Bank of Canada Should Beware "Mission Creep"

  • When the Bank of Canada and the Government of Canada renew their inflation targeting agreement later this year, they should disregard proposals to expand the mandate of monetary policy beyond its central goal of achieving and preserving price stability.
  • These proposals include suggestions that monetary policy promote a greener economy, give greater emphasis to full employment, tackle income inequality, restrain the price of housing and accept greater responsibility for safeguarding financial stability.
  • While these are all good and worthy goals, Murray argues that this sort of mission creep risks undercutting monetary policy’s ability to fulfill its primary responsibility and is neither necessary nor helpful to the attainment of these additional challenges.
John Murray

John Murray held a number of senior positions during his 34-year career at the Bank of Canada, and served as a Deputy Governor from 2008 until his retirement from the Bank in 2014. He holds a BComm from Queen’s University, and an MA and PhD in Economics from Princeton University.