Re:The Fed’s Inflation Goal Is Completely Arbitrary
by mamonster on Friday March 10, 2023 @05:12AM
(#35092611)
2% is basically the safe spot to prevent deflation
If you target 1% and you screw up your policy you might go below 0%, which is a big no-no according to modern economics and CB policy.
The actual big question which none of the CBs want to answer is whether deflation would necessarily be bad today. Modern CB discussion on deflation is basically "Great Depression bad" and "Look at Japan".
If you target 1% and you screw up your policy you might go below 0%, which is a big no-no according to modern economics and CB policy.
The actual big question which none of the CBs want to answer is whether deflation would necessarily be bad today. Modern CB discussion on deflation is basically "Great Depression bad" and "Look at Japan".