is a correlation between current perceptions and future expectations of inflation at both the one - and five - year horizons. for example, if consumers think prices have notably increased in the last 12 months, then there is a good chance they will expect inflation to stay high in the future. finally, the difference between expected inflation and current inflation ( as well as relative to our target ) increases as the horizon is extended from one year to five years. 6 chart 1 : households perceive inflation to be higher than official measures % 2014q4 2015q4 2016q4 2017q4 bank of canada inflation - control target current perceptions of inflation five - year - ahead inflation expectations sources : statistics canada and bank of canada 2018q4 2019q4 actual cpi one - year - ahead inflation expectations last observation : 2020q2 as an aside, it is noteworthy that a comparison of the csce with a similar survey published by the new york federal reserve bank finds the perception gap is smaller and less dispersed in canada than in the united states ( chart 2a and chart 2b ). this difference may reflect the impact of different communication strategies by the bank of canada and the us federal reserve. 7 5 it is important to note that this gap is observed, on average, across canadian households. the gap is larger for some groups — for example, younger households. 6 the higher expected inflation rate at the five - year horizon might reflect increased uncertainty about inflation outcomes, as suggested by relatively lower response rates. we also observe a greater degree of dispersion among respondents at this horizon. 7 bellemare et al. ( 2019 ) conjecture that the narrower gap in canada might be related to the bank ’ s success with and focused communications on the 2 percent inflation target, creating a focal point for perceptions and expectations at 2 percent. in bellemare, kpekou tossou and moran, “ the determinants of consumer's inflation expectations : evidence from the us and canada, ” ( unpublished manuscript, department of economics, universite laval, july 1st, 2020 ), latex. - 5chart 2a : inflation forecast errors are larger in the united states than in canada % - 1 2013q3 2014q3 2015q3 2016q3 2017q3 2018q3 canada one - year - ahead inflation expectations canada inflation realization, one year later united states one - year - ahead inflation expectations united states inflation realization, one year later sources : statistics canada, federal reserve bank of new york survey of consumer expectations, us bureau of

for each decision and requiring participant creditors not to seek better terms outside the framework, and by insisting that the debtor not give better terms to any other creditor. because the club does not require uniformity of treatment among different debtors – a principle which would be difficult to enshrine in a written charter – it has shown considerable flexibility and ingenuity in dealing with the different forms in which creditors are willing to provide relief, and in inviting relevant non - paris club members to take part in meetings as needed. of course this also means that political considerations visibly play a role in deciding on the treatment each debtor receives, but that is hardly surprising when inter - governmental debt is being considered. for many years the paris club protected the senior status of the imf and the world bank, and did not request any debt reduction on their part. the logic of this approach was quite simple : generally the fund and the bank provided new money. this principle has now been breached, and it remains to be seen what the long - term consequences will be. but we should recall that countries include claims on the fund as part of their reserves, and that at the time of the hipc debt relief decision, at least one major country said that it would have to reappraise that view. while the club is able to produce an acceptable extent of comparable concessions by official creditors operating within its framework, it has increasingly had to deal with the issues arising from the growing in addition, liquidity is likely to be important for a country without market access role of the private sector in financing developing countries, and those that result from the growing importance of official creditors who are not members, prominent among them china. there are two issues with regard to the role of the private sector. the first is the pace at which countries that have received debt relief begin borrowing from the market. so long as a country is in an imf program, the fund has been able to exert some – though not necessarily a decisive – influence on the rate of government borrowing from the private sector. if the country has exited from an imf program, it is left to market and internal fiscal discipline to control its rate of borrowing. we need to remind ourselves that until very recently we were in a phase of optimism about the emerging market and developing countries, with plentiful liquidity, and that these conditions could change. at that point we might discover that market and internal fiscal discipline may not be sufficient to prevent problems in the event