We are the 2%

Central bankers pledge allegiance to the 2% inflation target-- a more or less random number. It's unlikely to change soon, but that doesn't mean it's a good idea.

Last week I wrote an op-ed for Politico Europe’s Central Banker newsletter arguing that the ECB’s 2% target is not fit for purpose and it should be replaced with a broader band of 1-3%. I intended to make a nuanced point about the ECB’s peculiar situation, but of course, the piece also forms part of a broader debate about the suitability of our inflatio…