Team Stagflation was wrong

 A current case in point is the determination of central banks across the world to get inflation down to 2 percent. Why 2 percent? 

That target emerged in large part from academic research suggesting (probably wrongly) that inflation at that rate would be more or less optimal. But that fixation has since taken on iconic status, with monetary officials insisting that failing to achieve it would fatally undermine their credibility.

After all, we have a standard economic theory of why stagflation happens: High inflation can persist despite high unemployment if continuing inflation has become embedded in expectations. This was the case in 1980, but it very much wasn’t the case in 2022.

That said, even I have been surprised at how much disinflation we’ve achieved at no visible cost. How did that happen?

Paul Krugman NYT 14 July 2023

https://www.nytimes.com/2023/07/14/opinion/inflation-economists-soft-landing.html