The Case for a Long-Run Inflation Target of Four Percent /

Many central banks target an inflation rate near two percent. This essay argues that policymakers would do better to target four percent inflation. A four percent target would ease the constraints on monetary policy arising from the zero bound on interest rates, with the result that economic downtur...

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Detalles Bibliográficos
Autor Principal: Ball, Laurence
Formato: Revista
Idioma:English
Publicado: Washington, D.C. : International Monetary Fund, 2014.
Series:IMF Working Papers; Working Paper ; No. 2014/092
Acceso en liña:Full text available on IMF
Descripción
Summary:Many central banks target an inflation rate near two percent. This essay argues that policymakers would do better to target four percent inflation. A four percent target would ease the constraints on monetary policy arising from the zero bound on interest rates, with the result that economic downturns would be less severe. This benefit would come at minimal cost, because four percent inflation does not harm an economy significantly.
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Descrición Física:1 online resource (21 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
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