Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234500 
Year of Publication: 
2017
Citation: 
[Journal:] Sveriges Riksbank Economic Review [ISSN:] 0348-6583 [Issue:] 2 [Publisher:] Sveriges Riksbank [Place:] Stockholm [Year:] 2017 [Pages:] 36-56
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
Most developed countries that conduct inflation targeting have chosen a target level at or close to 2 per cent. Recently, an international debate has arisen on whether this level should be increased. In this article, we review both the arguments in the more policy-oriented debate on the level of the inflation target and what academic research says about the optimal rate of inflation. One conclusion is that the threshold for increasing the target is high, primarily because there are significant practical problems linked to abandoning a target that is already established and changing to another one. The article also discusses the challenges that central banks can face in the near term as regards achieving their current targets.
Subjects: 
Monetary policy
Level of inflation target
JEL: 
E52
E58
Document Type: 
Article
Document Version: 
Published Version
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