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Monetary Policy

Why Monetary Policy Matters: A Canadian Perspective

by Christopher Ragan


1.  The Economy and Economic Policy

  • 1.1 What is monetary policy?
  • 1.2 Why focus on inflation?

2.  Canada's Inflation Performance, and Why It Matters

  • 2.1 Inflation and uncertainty
  • 2.2 Why inflation uncertainty matters

3.  Stability in Canada's Output, and Why It Matters

  • 3.1 Has Canadian output growth become more stable?
  • 3.2 Why stable output growth is desirable
  • 3.3 Good policy or just good luck?

4.  Monetary Policy: How It Works, and What It Takes

  • 4.1 The transmission mechanism of monetary policy
  • 4.2 Time and uncertainty
  • 4.3 Monetary policy faces two types of uncertainty
  • 4.4 Good information, and plenty of it

5.  Final Remarks

Appendix: The Continuing Puzzle of the Inflation-Growth Relationship

Glossary of Economic Terms