While the Bank of Canada has quietly shelved consideration of moving to price-level targeting as a basis for monetary policy, the merits of this approach remain strong, according to a report released today by the C.D. Howe Institute. In "Price-Level Targeting: A Post-Mortem?" author Steve Ambler finds price-level targeting has convincing advantages over inflation-targeting, especially as a tool for avoiding the worst consequences of economic downturns.
