choose to reveal such information in their speeches and other public communications. a natural next step would be to include a matrix of output, inflation, and unemployment, and the associated policy path assumptions that each policymaker submitted. this would make the information in the sep easier to interpret and give a better sense of the linkage between changes in economic conditions and policy. second, i believe the federal reserve should do a more comprehensive monetary policy report four times a year. currently, the chairman testifies before congress twice a year – in bis central bankers ’ speeches fact, he is doing so today – and that testimony is accompanied by a written report. in addition, the chairman holds press briefings four times a year to summarize the sep. i think there is an opportunity to combine these efforts in a more comprehensive report on monetary policy. most central banks that have adopted an inflation target have also sought to improve communication and transparency through the publication of a regular policy report. in the u. k., for example, the bank of england issues a quarterly inflation report. other countries produce a monetary policy report that discusses the central bank ’ s forecasts and the longerterm context of policy. these reports offer an opportunity to reinforce the underlying framework the central bank has adopted for the conduct of policy. i think the fed should consider producing a similar report to elaborate and reinforce its policy framework and how it relates to economic conditions. these reports will help improve the public ’ s understanding of policy, which will help make policy more effective and the central bank more accountable. third, i believe the fomc should adopt clearer guidelines on how policy evolves with economic conditions. the better the public and the markets understand how policy is likely to be adjusted as the economy changes, the more predictable policy becomes, which promotes price stability and better economic outcomes. the history of u. s. monetary policy is filled with stops and starts and changes in direction, yet the fed has communicated little about what drives those decisions. indeed, historically, central bankers have tended not to reveal such information, since they preferred discretionary policy over systematic policy. of course, policymakers do not know with any degree of certainty how economic conditions will evolve. so they cannot and should not say with any certainty what policy will be in the future. but policymakers can provide information about the factors that will influence their policy decisions. some call this a policy rule. milton friedman advocated a rule in the form of a k - percent growth rate of the money

. this uncertainty means that it is imperative to look beyond such measures of “ full ” or maximum employment toward other indicators of labour market slack. in this instance, the bank has pointed to relatively subdued wage growth as a possible sign that the job market may have more room to run. economic theory tells us that when the actual jobless rate is at the natural rate, an economy is essentially at full employment. at that point, we would expect wages to be rising at the same pace as the target inflation rate plus the trend rate of productivity growth. this is because the strongest underlying factors that determine worker pay in real terms are how productive workers are and their value to an employer ’ s production process. 4 so, for canada, this implies wage growth of around 3 per cent — 2 per cent for inflation and 1 per cent for trend productivity growth. wage growth has picked up considerably to average about 2½ per cent in 2018, compared with 2 per cent over the past five years. 5 but we are still shy of what one would expect in a tight labour market. the story is similar in the united states. the us jobless rate has been below 4 per cent for a while. this is much lower than the estimate of the us natural rate — currently pegged at around 4½ per cent. 6 yet, wage gains only recently reached the sum of inflation and productivity growth. in canada, regional and sectoral factors can explain a lot of why wage growth has been tame. the steep drop in oil prices that occurred in the second half of 2014 had an impact that rippled across canada and is still being felt. wage gains in energy - intensive regions continue to lag behind those in the rest of the country. to give you a sense of how big a deal this is, wage growth in the third quarter of 2018 was just under 2 per cent in alberta, saskatchewan, and newfoundland and labrador. it was about three - quarters of a percentage point higher in ontario and quebec, so closer to the 3 per cent one would expect. for more detail on how wages are determined, see the economy, plain and simple article that we released today. this is according to the bank of canada ’ s composite wage measure, called the “ wage - common. ” this measure is created by extracting the common signal from four sources of wage data ( the national accounts ; the productivity accounts ; the survey of employment, payrolls and hours ; and the labour force survey ) and filtering out indicatorspecific