The Bank of Canada has released the Bank of Canada Review Winter 2009-2010, with articles:
- Declining Inflation Persistence in Canada: Causes and Consequences
- The Evolution of Capital Flows to Emerging-Market Economies
- Making Bank Notes Accessible for Canadians Living with Blindness or Low Vision
Inflation persistence is defined as
the correlation between current and lagged inflation.
The article concludes that the low level of inflation persistence in Canada will facilitate Price Level Targetting, should be BoC implement such a policy:
For a central bank considering the relative merits of price-level versus inflation targeting, recent research suggests that low structural persistence in inflation will tend to favour the former. Moreover, the transition period to a price-level-targeting regime, when the private sector may still be learning about the precise nature of the change, appears to be less costly when structural infl ation persistence is low.