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.
Cecchetti and Schoenholtz on raising the…
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.