With regard to other countries, it is important to note that one of the major advantages of a flexible exchange rate is that we can have a monetary policy that is right for our country. As we have already mentioned, when the global recession hit, Canada fared much better than anywhere else. Nevertheless, it was a major recession. Our monetary policy consisted of lowering the key interest rate as much as possible. The government also provided significant fiscal stimulus.
As we stated in our monetary policy review, when we look at the current situation, there is still considerable monetary policy stimulus in Canada. We expect this to allow us to achieve the 2% inflation target. In other words, we think we are on the right track.
Furthermore, it is important to note that keeping our inflation target at a low, predictable and stable rate is the best thing our monetary policy can do right now. History has taught us that when we try to target things directly, such as the unemployment rate, in the end, we wind up with a higher unemployment rate and higher inflation. That is what happened in the 1970s.
It is also important to note that our inflation target is flexible. We take factors like debt levels and the unemployment rate into account when adjusting our inflation target.
For instance, let's look at a few simple figures. The unemployment rate has gone down since we last targeted inflation. It is more stable. If we look at other indicators, such as the labour market, we see that many of them have improved considerably.
Thank you.