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mark carney : renewing canada ’ s monetary policy framework remarks by mr mark carney, governor of the bank of canada and chairman of the financial stability board, to the board of trade of metropolitan montreal, montreal, quebec, 23 november 2011. * * * over the past twenty years, canadians have enjoyed a more stable and prosperous economic environment. even during the recent crisis, the canadian economy proved more resilient and recovered faster than our advanced - economy peers. the strength and relative stability of our economy have been due, in part, to canada ’ s inflation - targeting regime, which was first adopted in 1991. earlier this month, the government of canada and the bank of canada jointly announced the renewal of the target for five more years – re - affirming its important role in enhancing the well - being of canadians. in my remarks today, i will discuss what went into this decision, while addressing three important issues that the crisis brought into sharp relief. i will conclude by providing a brief summary of how we apply this framework to today ’ s circumstances. canada ’ s monetary policy regime has proved its worth in both turbulent and tranquil times the effectiveness of canada ’ s inflation - targeting regime is well established. since its adoption, inflation has averaged 2 per cent, as measured by the consumer price index ( cpi ), and its standard deviation has fallen by roughly two - thirds, compared with the 1970s and 1980s. greater price stability has allowed canadians and their businesses to manage their finances with greater confidence. interest rates have also been lower in both nominal and real terms across a range of maturities. as a consequence of these developments, low, stable and predictable inflation has encouraged more solid economic growth and lower and less - variable unemployment. the global economic and financial crisis of 2008 – 09 delivered the largest shock in decades, putting the regime to an unprecedented test. it passed. the experience re - affirmed the strength of canada ’ s monetary policy framework, including the value of the regime ’ s inherent flexibility. nonetheless, the bank has sought to draw the appropriate lessons from the debacle, particularly from the experiences of others for whom price stability proved insufficient to prevent economic and financial disaster. our work has provided important insights into the management of our regime, as well as potential lessons for other countries where trying circumstances have raised questions regarding their monetary policy frameworks. what is the optimal level of inflation? there is an ongoing debate regarding the “ right number ” for the inflation target. we have been