Don’t blame the Bank of Canada for the sharp rise in inflation that followed the Covid pandemic. Once Ottawa decided to keep Canadian households and businesses afloat without a plan for who would foot the bill, there wasn’t much Stephen Poloz or his successor Tiff Macklem could do to curb its inflationary impact. In fact, the two Bank of Canada governors deserve credit for not making things worse.
That’s the headline from a C.D. Howe Institute paper published this week by David Andolfatto and Fernando Martin.
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