Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Working paper: The impact of inflation targeting: Testing the good luck hypothesis
Was the fall in the level and volatility of inflation over the last 30 years the result of good luck, or good monetary policy? We assess the inflation experience of Canada, an early adopter of an inflation targeting policy. Good luck explains only a minor portion of the changes in inflation after the shift in policy. Most of inflation and output stabilization is explained by the impact on expectations.