david dodge : update on economic and monetary developments in canada opening statement by david dodge, governor of the bank of canada, before the house of commons standing committee on finance, ottawa, 1 may 2001. * * * i am pleased to appear before this committee for the first time since my appointment as governor of the bank, on the occasion of the release today of our spring monetary policy report. mr. knight and i hope to be able to return on the day of, or shortly after, the publication of our report every may and november. the report provides our latest assessment of the outlook for economic growth and inflation in canada. before i give you a flavour of that assessment, i would like to say a word about the objective of canadian monetary policy and how we go about achieving it. the bank of canada has a commitment to contribute to the economic well - being of canadians. thus, we must conduct monetary policy so that it fosters sustained economic growth by creating conditions that favour rising output, employment, and incomes, and a more stable macroeconomic environment. the unique contribution that the bank can make to sound economic performance is to preserve confidence in the future value of money. canadians should be able to go about their business fully expecting that their central bank will keep future inflation low, stable, and predictable. in this way, they will be able to make sounder economic decisions. and this will lead to better overall economic performance. the bank pursues low inflation within a monetary policy framework based on an inflation - control target and supported by a flexible exchange rate. the current target is to hold the trend of inflation inside a range of 1 to 3 per cent, with emphasis on the midpoint of 2 per cent. inflation - control targets help to anchor policy and to anchor people's inflation expectations. and they provide the bank with an effective mechanism for assessing demand pressures. in this way, we can take action to prevent overheating when the economy is strong and is pushing against capacity limits, and to support growth when the economy is weak. at the same time, a flexible exchange rate allows our economy to adjust to disturbances, such as changes in foreign demand for our products or changes in the relative prices of our exports compared with our imports. and it helps us to adjust with less overall fluctuation in output and employment than if the exchange rate did not move. with this brief overview of canada's inflation - control strategy, let me now turn to the economic situation. when my predecessor appeared before

time when these policies, including the roll - out of the projects financed with ngeu funds, need to have the capacity to address the structural transformations facing our economy, such as those arising from the fight against climate change, the reduction of inequalities, the improvement of productivity, digitalisation and population ageing. the work that cemfi ’ s experts and our own researchers will carry out as they conduct these evaluations is also an example of the banco de espana ’ s commitment to this culture of evidence - based policies. in this way, we hope to establish a genuine technical hub specialised in the evaluation of public policies and programmes that can serve other areas of public policy. and, beyond this specific initiative, at the banco de espana we believe that we can also contribute to these aims by evaluating the actions taken in the exercise of our responsibilities and allowing the 1 / 2 bis central bankers'speeches research community to use our information. the data laboratory recently launched by the banco de espana ( belab ) is a good example of this service to society, since it makes the microdata from many of our main databases available to researchers. so is the recent agreement between the national statistics institute, the tax agency, the social security system and the banco de espana, as holders of a significant amount of administrative information and granular data collected for statistical purposes, for the joint design of a collaborative data system to which researchers will have access, provided that the information is to be used for scientific purposes in the public interest. the challenge is for initiatives such as those we are seeing here today to become widespread, so that a genuine culture of evaluating public policies can take root, allowing their design and implementation to be improved on the basis of evidence. thank you. 1 see the speeches “ the role of the media in promoting evidence - based policies ” at the lideres de la informacion award ceremony and “ long - term considerations in economic policy ” at the awarding of the gran cruz al merito en el servicio de la economia by the consejo general de economistas ( general council of economists ) to the banco de espana. 2 / 2 bis central bankers'speeches