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Choosing the right target: Real options for the Bank of Canada’s mandate renewal

Summary:
That's the title of a Max Bell School of Public Policy conference to be held in Montreal on April 30/May 1. I'm quite excited about it.  A couple of years ago, I wrote a column scolding the Bank of Canada for the lack of transparency in the mandate renewal process. But after thinking about it some more, I realized that are limits to what the Bank can say in public. The Bank's famed independence has strict bounds. The Governor has operational freedom to achieve Bank's objectives, but the Bank does not have the authority to decide what those objectives should be. The responsibility for choosing the goals lies with elected officials, and with the Minister of Finance in particular. This responsibility is discharged by setting out the mandate. The Bank's job is to carry it out. Where should

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That's the title of a Max Bell School of Public Policy conference to be held in Montreal on April 30/May 1. I'm quite excited about it. 

A couple of years ago, I wrote a column scolding the Bank of Canada for the lack of transparency in the mandate renewal process. But after thinking about it some more, I realized that are limits to what the Bank can say in public.

The Bank's famed independence has strict bounds. The Governor has operational freedom to achieve Bank's objectives, but the Bank does not have the authority to decide what those objectives should be. The responsibility for choosing the goals lies with elected officials, and with the Minister of Finance in particular. This responsibility is discharged by setting out the mandate. The Bank's job is to carry it out.

Where should the debate about the goals of monetary policy take place, if not at the Bank? Nowhere, it seemed.

This is why the Max Bell School is holding this conference. We've asked six distinguished scholars to make the case for each of the six following options:

  1. Raising the inflation target (Luba Petersen, SFU)
  2. Reducing the inflation target (Thor Koeppl, Queen's)
  3. Targeting NGDP or the price level (Steve Ambler, UQAM)
  4. Adopting a dual mandate (Doug Laxton, Nova School)
  5. Incorporating asset prices (Sylvain Leduc, FRB of San Francisco)
  6. Maintaining the status quo (Michelle Alexopoulos, Toronto)

There will also be a keynote speech, given by David Dodge.

I'll stop here; we'll be talking more about the event and about the mandate renewal process over the next 10 weeks.

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