Bank of Canada Review (Winter)
Inflation persistence, or the correlation between current and lagged inflation, had dropped significantly compared to the 1980s, an article in the winter edition of the Bank of Canada Review said.
The article, by Rhys Mendes and Stephen Murchison, pointed out that a variable which was persistent would respond more sluggishly in the short term, and in setting future inflation targets, the relationship between present and lagged inflation was crucial to central banks, and price and wage-setters.
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