Uncertainty can call for asymmetric action – Canada’s Wilkins
“Uncertainty is not a reason for paralysis,” says Bank of Canada deputy
Central banks dealing with uncertainty may need to employ policy that is less than balanced, according to the Bank of Canada’s Carolyn Wilkins.
The senior deputy governor told an audience in New York on November 15 that monetary policy “can become asymmetric” when uncertainty is “taken seriously” in policy design. The bias can be either towards aggression or caution.
An example of an aggressive course of action was when the Bank of Canada faced uncertainty about hitting the effective lower
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