Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261104 
Year of Publication: 
2020
Series/Report no.: 
CASE Reports No. 501
Publisher: 
Center for Social and Economic Research (CASE), Warsaw
Abstract: 
Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they should revise the inflation target downwards and publicly explain the rationale for such a move. Risks to the independence of central banks come from their additional mandates (beyond price stability) and populist politics.
Subjects: 
monetary policy
inflation
inflation target
economic growth
central bank independence
JEL: 
E31
E51
E52
E58
F62
ISBN: 
978-83-7178-691-4
Document Type: 
Research Report

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