2min chapter

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Worldview — the power of central banks

Engelsberg Ideas Podcasts

CHAPTER

The Importance of a Positive Inflation Target

The idea of the inflation target was really to have a round number that everyone would understand. A measured inflation rate of 2% probably corresponds to an actual inflation rate of somewhere between a half and 1%. So it's in order to hold central banks accountable so that parliament can say, well, your target's 2%, it's 3.5%; what are you going to do to bring it back?

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