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Emily Pachell of Calgary, AB, is a third-year philosophy, politics, and economics (PPE) student tackling Canadian monetary policy head-on through her Independent Student Research Project (ISRG), Rethinking Inflation Targeting: Assessing the Future of Canadian Monetary Policy. 

Pachell’s research focuses on monetary policy alternatives for the Bank of Canada.  

Since 1991, Canada has used inflation targeting (set at 2% with a 1–3% band) as its monetary policy framework. 

“Given events such as the 2008 recession, as well as the inflation following COVID, there’s solid evidence that there might be a better framework out there,” Pachell says. “I’m creating a report that will suggest all of the most viable alternatives, how they could be implemented, and what might be most appropriate going forward.” 

Her research involves a structured outline of each alternative, with about two weeks spent on an in-depth analysis of academic literature for each policy option.  

Pachell says this research has been a unique opportunity that expanded her learning outside of the classroom. 

The methodology that she is using is policy review, papers, and literature, applying the skills that she’s developed in other classes. 

“I think the greatest value has been solidifying my research skills, which I think at the undergraduate level is really important because it directly applies to your coursework, but also in setting you up for future academic endeavours.” 

One of the classes that supported her research was an ethics introductory course, which helped her improve her literature review skills.  

“Applying my skills to these more technical economics papers, with information I hadn't learned yet, required critical thinking and comprehensive reading skills that I picked up in that class and were easily transferable. My macroeconomic courses also readily applied an understanding how the Bank of Canada works and how these policy alternatives could be implemented in the real world.” 

Pachell’s research, supervised by Philosophy, Politics, and Economics (PPE) Postdoctoral Fellow Dr. Casey Pender, will be the first comprehensive survey to compare alternative monetary policy frameworks side-by-side. 

“It has been a pleasure to supervise Emily this summer. She is incredibly thoughtful, self-motivated, and hit all our agreed-upon deadlines without issue,” says Pender. “My role as a supervisor has primarily just been to provide feedback and suggestions on early drafts, which Emily seemed to think carefully about and internalize without issue. I would suspect Emily now has a much better understanding of Canadian monetary policy than most undergraduate students.” 

One of her goals is to make the review accessible, written in clear language so that anyone can understand the options.  

“Monetary policy is technical, often hard to understand and explain, and the language surrounding it can be full of jargon and equations. By providing a layman's explanation of framework options and clearly weighing the pros and cons of each one, Emily's research is not only valuable to academics but to policymakers and any Canadian interested in what the [Bank of Canada] does and why,” says Pender. 

Based on her research so far, Pachell is advocating for a price-level targeting regime, which sets a long-term path for prices and, if the target is missed one year, adjusts in the opposite direction the next year, helping keep overall growth steady over time.