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Economists are increasingly debating the value of the 2 percent inflation target in the major Western economies. Major central banks have raised interest rates over the past year, but inflation remains stubbornly above their 2 percent targets. But how did you reach this goal?
Why is this important?
The European Central Bank, the Federal Reserve, the Bank of Japan, Sweden’s Riksbank, the Bank of Canada, the Bank of England… all aim for a 2 percent inflation target. But the question is whether this target, emanating from 1988, is still sufficient in an economy that has completely changed.in the news. Economist Adam Tose writes in financial times. But, like any other quasi-constitutional rule, it must be subject to public scrutiny and judgment in the light of the moment. The 2 percent target was a realistic target in the era of the “Great Moderation”. We have to ask is: Is it also suitable for the era of Polycrisis?
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