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The economy naturally grows as we have more children. If the money supply is unchanged, this will cause deflation. Is 2% a good target? Probably not. Probably
by arcbyte 4y ago
The economy naturally grows as we have more children. If the money supply is unchanged, this will cause deflation.
Is 2% a good target? Probably not. Probably there should be a better connection to the population growth rate.
Ultimately the goal is price stability.
- misja111 4y ago> Ultimately the goal is price stability. I take it you're not living in the EU?
- radford-neal 4y agoPrinting more money to handle the increased need for it just due to population growth (or growth in the economy) would lead to 0% inflation, not 2%. By definition, 2% inflation is not "price stability".