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January 12, 2021

Bank of Canada Built Solid Track Record Pre-COVID

  • The Bank of Canada built an impressive track record with its policy moves pre-COVID, then the pandemic knocked its plans off track.
  • In the Institute’s first annual review of the Bank’s monetary policy performance, authors Steve Ambler and Jeremy M. Kronick look at whether the stance of monetary policy was appropriate for hitting the Bank of Canada’s inflation target during 2018 and 2019, and examine how to determine in real time whether monetary policy is too loose or too tight.
  • Canada’s headline inflation in 2018 averaged 2.3 percent and in 2019 it was 1.95 percent – almost indistinguishable from the target. With the most massive expansion of its balance sheet outside of wartime, the Bank now faces challenges hitting its 2 percent target.
Steve Ambler

Professor Steve Ambler taught at l’École des sciences de la gestion de l’Université du Québec à Montréal (ESG UQAM) from 1985-2020, and chaired the Department from 2012-2015.

Jeremy Kronick

Jeremy M. Kronick is Associate Vice President and Director of the Centre on Financial and Monetary Policy at the C.D. Howe Institute.