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Theoretically isn’t the 2% target based on the BLS numbers for inflation? Thus, if we wanted to compare, the “Truflation target” might be more like 1% then? It’
by ghayes 4y ago
Theoretically isn’t the 2% target based on the BLS numbers for inflation? Thus, if we wanted to compare, the “Truflation target” might be more like 1% then? It’s weird to change the method but keep the arbitrary target.
- jfengel 4y agoThe 2% target is rather arbitrary, and is independent of the measurement method. Both the target and all of the metrics are trying to capture the intuitive, handwavey notion of "a healthy economy". So they don't put too much stress on that 2% number. If the number were at 1.9% or 2.1%, they'd assume it's all in the margin of error. If it gets below 1% or above 4% for a while, they apply some tools in the direction of 2%, but not trying to overshoot.
- arcticbull 4y agoYeah, something something Philips Curve. [1] [1] https://www.stlouisfed.org/open-vault/2020/january/what-is-phillips-curve-why-flattened https://www.stlouisfed.org/open-vault/2020/january/what-is-p...