Mark Thoma sent round this interesting post from Cecchetti and Schoenholtz's blog, [CS] asking whether 2% inflation targets were still appropriate. In a nutshell, they argue that if central banks were starting over, they should pick a higher number. But that the credibility risks of moving now are too great to make it worth it.
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Cecchetti and Schoenholtz on raising the…
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Mark Thoma sent round this interesting post from Cecchetti and Schoenholtz's blog, [CS] asking whether 2% inflation targets were still appropriate. In a nutshell, they argue that if central banks were starting over, they should pick a higher number. But that the credibility risks of moving now are too great to make it worth it.