15min chapter

Masters in Business cover image

Bill Dudley on Monetary Policies

Masters in Business

CHAPTER

The 2% Inflation Target and its Rationale

This chapter discusses the origins and rationale behind the 2% inflation target, exploring its history and whether it is a meaningful number for price stability. It also delves into the benefits of having a little bit of inflation in the economy, such as efficient wage adjustments and providing the Federal Reserve with room to cut interest rates during economic downturns.

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