Jamie Armour - Latest

• June 11, 2006

  Evaluating Measures of Core Inflation

  Bank of Canada Review - Summer 2006 Thérèse Laflèche, Jamie Armour

  Since the Bank of Canada adopted inflation targeting in 1991, it has focused on a measure of core inflation as a shorter-term guide for monetary policy. When the targets were renewed in 2001, the Bank adopted CPIX as its measure of core inflation because of the advantages it offered. Leflèche and Armour review the experience with CPIX and whether the criteria used to select it in 2001 still favour the measure today. They describe the various measures of core inflation monitored by the Bank and evaluate them on the basis of the volatility of the components, the volatility of the core measures themselves, absence of bias relative to total CPI, predictive power, and certain practical criteria, including timeliness and credibility. They conclude that CPIX still satisfies all the empirical and practical criteria.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation and prices, Inflation targets, Monetary policy framework
• December 13, 1999

  Feedback Rules for Inflation Control: An Overview of Recent Literature

  Bank of Canada Review - Winter 1999–2000 Agathe Côté, Jamie Armour

  Feedback rules are rules aimed at guiding policy-makers as they face the problem of keeping inflation close to a desired path without causing variability elsewhere in the economy. These rules link short-term interest rates, controlled by the central bank, to the rate of inflation and/or its deviation from a target rate. The authors describe the most popular types of feedback rules and review some simulation results.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Interest rates