The volatility of Canadian short-term interest rates increased after March 1980 due to a change in the way the Bank of Canada manages interest rates.

Question

Quizplus · Accepted Answer

After March 1980, the Bank of Canada shifted its focus towards targeting the money supply rather than directly setting interest rates, which led to increased volatility in short-term interest rates as market forces played a larger role in determining them.

The Volatility of Canadian Short-Term Interest Rates Increased After March