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Wilfrid Laurier University Leaf
December 11, 2016
Canadian Excellence

David Johnson


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David Johnson

How has inflation changed in Canada? A comparison of 1989-2001 to 1964-1988 (ABSTRACT)

Johnson, D., & Gerlich, S.

published: 2002 | Research publication | Refereed Journals - Economics

Johnson, D., & Gerlich, S. (2002). "How has inflation changed in Canada? A comparison of 1989-2001 to 1964-1988". Canadian Public Policy, 28 (4), 563-580.

ABSTRACT:  This paper examines whether the inflation process has fundamentally changed in Canada in the last decade. The dynamics of inflation from 1964 through 1988 are compared to the dynamics of inflation from 1989 to 2001. Although the average rate of inflation fell and inflation has become less variable since 1988, the dynamics of inflation have not changed substantially. A negative output gap reduces inflation and the adjustment of expected inflation to lagged actual inflation continues to be slow. The sacrifice ratio, the short-run inflation-output trade-off remains similar. The makers of monetary policy in Canada face the same trade-offs before and after 1988.

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revised Jan 18/05

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