WATCH: Canadian PM Mark Carney, in an address to the nation today, falsely claimed that during the 2009 financial crisis he “developed a practice called ‘forward guidance’.”

Forward guidance is a monetary policy tool in which a central bank communicates its expected future policy path, particularly interest rates, to influence economic expectations today. While the concept was developed through academic work in the early 1990s by economists such as Michael Woodford in the United States and Lars Svensson in Sweden, its first clear real world use was in Japan in the late 1990s under Governor Masaru Hayami.