Adoption of a more explicit price stability framework (1987–88) 4.1. Policy background

On 1 February 1987, John W.Crow became Governor. The output gap had largely closed, with inflation stabilizing at approximately 4 per cent. The economy was about to overheat, and it was more important than ever for the Bank of Canada to have a clear sense of direction: Where did it want to go? How would it get there?