Using the Bank of Canada's main projection and policy-analysis model, ToTEM, this paper measures the welfare gains of … switching from inflation targeting to price-level targeting under imperfect credibility. Following the policy change, private … agents assign a probability to the event that the policy-maker will revert to inflation-targeting next period. As this …

particular the aim of price stability, understood as low and stable inflation. Design/Research methods: The article was prepared … inflation reduces uncertainty about future price developments. This facilitates decision-making for companies concerning …