conservative_librarian Wrote:
Aug 30, 2012 4:11 PM
I think there is room for disagreement on what an 'acceptable' inflation target would be. I think it is easy to say 5% is far too high (because the return on investment for capital projects would almost never match the rate of inflation) I also think if you attempt to reach zero, there is a disincentive for investors to put capital to work, and because there will always be some fluctuation, you would have periods of deflation (lets say moving between -2 and +2) which I dont think would be good. I chose 1-2% because I want to be much lower than 5 and above zero, the exact number would be something I am sure the economists could figure out based on historic data