Why price stability is not enough

For the most part, central banks have pursued the goal of price stability, typically defined as a low and stable rate of inflation, over the last few years. For some countries and regions, this goal has been made explicit through the use of an inflation target. For others, the goal has been more implicit but has nevertheless been given a particularly high priority. In the hierarchy of possible macroeconomic policy objectives, price stability comes right at the top. The underlying assumption i