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Flexible inflation forecast targeting: Evidence from Canada
Author(s) -
Otto Glenn D.,
Voss Graham M.
Publication year - 2014
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12083
Subject(s) - inflation (cosmology) , economics , inflation targeting , target range , horizon , econometrics , range (aeronautics) , monetary economics , central bank , monetary policy , macroeconomics , mathematics , engineering , physics , theoretical physics , geometry , aerospace engineering
We test whether the Bank of Canada pursues a flexible inflation forecast target, one that weights output growth as well as inflation. For the period 1996–2007, we find evidence that the Bank did effectively pursue such a target over the forecast horizon of 12 to 18 months. We find the relative weight that the Bank gives to output growth in its target to be positive and statistically significant within the range of 0.2 to 0.4.