@article{Implications:756,
      recid = {756},
      author = {Hostland, Doug},
      title = {Changes in the Inflation Process in Canada: Evidence and  Implications},
      publisher = {Bank of Canada},
      address = {1995},
      pages = {1 online resource (v, 42 pages)},
      abstract = {The Canadian economy is currently in transition from a  period of disinflation to one with a very low and  relatively stable inflation rate. Against this background,  the author asks whether reduced-form parameters should be  expected to be invariant to changes in the inflation  process.

This raises two empirical issues. The first  relates to whether shifts in the Canadian inflation process  can be identified over time. It appears so, since casual  observation as well as various statistical procedures  indicate that there was a unique period from the mid-1950s  to the early 1970s when inflation was low and relatively  stable.

The second issue relates to whether there is  evidence that parameter instability corresponds to shifts  in the inflation regime. Statistical tests indicate that  parameter instability is an important concern in  reduced-form models of the inflation process, particularly  for the early 1970s. The evidence for Canada suggests that  inflation forecasts from reduced-form models may be  unreliable in the presence of important changes in the  inflation process.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/756},
      doi = {https://doi.org/10.34989/swp-1995-5},
}