Letter from James Hanshaw, Zurich, Switzerland
The 2 per cent figure was politically plucked out of the air in 1990 to be used by the central bank of New Zealand — a tiny country with agriculture as the main part of its economy — and later copied by other countries
It had — and has — no scientific base.
US inflation averaged 3.3 per cent over 100 years from 1914 to 2014, during which time the economy did well
Yet despite those facts, Fed chair Jay Powell has said in recent times: “We are strongly committed to returning inflation to our 2 per cent goal in support of a strong economy that benefits everyone.”
https://www.ft.com/content/d7a23964-af9e-42ef-abbb-a06b565cb99c
John Plender The widespread adoption of 2 per cent inflation targets has been, at best, a mixed blessing.
https://englundmacro.blogspot.com/2024/11/central-banks-escape-route-from-of-boom.html
Bara inflationen blir två procent kommer allt att bli bra - den nya religionen
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