The Bank of Canada began targeting inflation at 2% beginning in 1991. In Figure 3.12, what do you observe about the variability of inflation about trend before 1991, and after 1991? Does this represent a success or failure of the Bank of Canada's inflation targeting policy? Why?

Figure 3.12 Percentage Deviation from Trend in Real GDP, and Deviation from Trend in the Inflation Rate, 1961-2018 8 6 Inflation Percentage Deviation from Trend 4 2 -2 -4 GDP -6 -8 1960 1970 1980 1990 2000 2010 2020 Year The inflation rate and real GDP are positively correlated, consistent with traditional Phillips curve ideas