Extraordinary Forward Guidance in Canada During the Pandemic
Abstract
We consider two trade-offs inherent to extraordinary forward guidance (EFG): potency versus flexibility, and the credibility of forward guidance versus the credibility of inflation targeting. We argue that the form of EFG used by the Bank of Canada during the COVID‑19 pandemic balanced both trade-offs relatively well. We also draw three lessons from the Bank’s pandemic EFG experience.
Fields of Study & Subjects
Monetary Policy and Economic Impact
COVID-19 Pandemic Impacts
European Monetary and Fiscal Policies
Publication details
- Journal / source
- Bank of Canada Research
- Publication date
- 13 February 2026
- Language
- EN