Does low inflation pose a risk to economic growth and central banks reputation?

Bericht

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.

Object Details

• ISBN: 978-83-7178-691-4
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CASE Reports ; No. 501

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Money Supply; Credit; Money Multipliers ; Monetary Policy ; Central Banks and Their Policies ; Economic Impacts of Globalization: Macroeconomic Impacts
• Subject: monetary policy ; inflation ; inflation target ; economic growth ; central bank independence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dabrowski, Marek
• Event: Veröffentlichung
• (who): Center for Social and Economic Research (CASE)
• (where): Warsaw
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/261104
• Last update: 10.03.2025, 11:44 AM CET