Inflation Rates

Inflation is defined as the general and persistent growth in the price level. It can be found by calculating the growth rate of the CPI.

Inflation Rate, π_{t} = \frac{C P I_{t} - C P I_{t - 1}}{C P I_{t - 1}} \times 100

Nominal and Real Interest Rates

r = \frac{1 + i}{1 + π} - 1 \approx i - π

$\large r$ $\large i$ $\large \pi$ is the inflation rate.

Inflation was very higher during the First World War
Following the end of the First World War, inflation decreased and became negative for more than 1 year. It is the first period of deflation that Canada experienced in our sample.
Canada experienced a second period of deflation that lasted more than a year after the Great Depression of 1929
Another period of high inflation happened around the Korean War (1950-1953).
The last period of high inflation happened between 1973 (oil price crisis) and the end of the 1982 recession.