In the central bank commitment story,high inflation in Canada during the 1970s was caused by

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The high inflation in Canada during the 1970s was caused by the inability of the Bank of Canada to commit to not using surprise inflation to increase output in the short run. This lack of commitment led to inflation expectations becoming embedded in the economy, causing a spiral of rising prices and wages. Lower interest rates, a deterioration of the trade balance, an appreciation of the domestic exchange rate, and a commitment to reduce government spending may have contributed to the inflation, but the root cause was the central bank's inability to credibly commit to a low inflation policy.

In the Central Bank Commitment Story,high Inflation in Canada During