A Dual Mandate for the Bank of Canada - or - Does Inflation Targeting Enhance Productivity Growth?
Marc Lavoie - University of Paris 13 and University of Ottawa
The Institute of Economics will hold the next meeting of its Seminar Series on Tuesday, February 6, 2018: Marc Lavoie, from the University of Paris 13 and University of Ottawa, will present the paper A Dual Mandate for the Bank of Canada - or - Does Inflation Targeting Enhance Productivity Growth?
The seminar addresses a fundamental concern about the current mandate of the Bank of Canada in favour of inflation targeting (IT) and discusses whether this mandate should be expanded to include some employment/unemployment commitment as well. The authors wish to argue that the current IT mandate is not neutral in its effect and leads to a somewhat biased outcome as regards to the functional distribution of income because it is an incomes policy that pits one social group against another to achieve inflation control. Moreover, they argue that the goal of price stability entrenched in the two percent IT rule has not delivered the promised high growth and increased productivity growth and rising living standards that would be shared more equally by most Canadians, and that a dual mandate would perhaps better serve that purpose.