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Mawakina Bafale, Jeremy Kronick and William Robson: The experience of the 1970s and 1980s is clear: without tighter monetary policy, inflation stays high
Publishing date:
Mar 23, 2022 • 26 minutes ago • 3 minute read • Join the conversation Inflation is widespread. Photo by Peter J. Thompson/National Post
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What explains surging inflation in Canada and many other advanced economies? Most commentators — correctly — blame loose monetary policy. That contrasts with the 1970s and 1980s, when many people argued inflation was not something central banks could control and that tight money was therefore a case of pain for no gain. With the Bank of Canada and other central banks beginning to tighten, those arguments may return. If they prevail, monetary policy will stay too loose and inflation will keep raging.
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