This paper aims at assessing the impact of inflation targeting on actual inflation when considering inflation … perceptions together with interrelated inflation expectations, modifying the seminal papers of Barro and Gordon (1983a and 1983b …). The modeling of inflation perceptions and of inflation expectations follows suggestions of recent literature, but also …

In Canada, targeting the inflation rate was intended as a temporary measure on a journey to price-level stability, but … account, changing beliefs about the stability or otherwise of ongoing inflation, the capacity of a flexible exchange rate to … inflation targeting arrived on the scene only after the Canadian regime was well established. …

Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic … growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the … reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they …