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Perceived inflation and reality - understanding the difference

Type
Speech
Subtype
Central banker's speech
Date delivered
21 September 2020
Country
Canada
Topics
Coronavirus
Remarks (delivered via webcast) by Mr Lawrence Schembri, Deputy Governor of the Bank of Canada, to the Canadian Association for Business Economics, Kingston, Ontario, 25 August 2020.

Introduction

Good afternoon. It is a pleasure to once again have this opportunity to speak at CABE's annual late-summer conference, although the circumstances have changed radically since I last spoke a few years ago. The COVID-19 pandemic has disrupted all our lives and imposed much hardship on many.

When I was last with you, we were on the top floor of a Kingston hotel overlooking Lake Ontario. I felt tested to hold your attention given the lovely view. Today, I'm similarly challenged, but by a virtual platform, made necessary by the serious health threat posed by the virus.

The topic I'll be addressing is inflation. It is a subject that central bankers never tire of talking about, since low and stable inflation is the core objective of the Bank of Canada's monetary policy mandate.

I would like to offer a slightly different perspective to engage your interest-namely, the difference between how people perceive inflation versus the actual measured rate.