Schmitt-Grohé, Stephanie; Uribe, Martín - C.E.P.R. Discussion Papers - 2010
Observed inflation targets around the industrial world are concentrated at two percent per year. This paper … investigates the extent to which the observed magnitudes of inflation targets are consistent with the optimal rate of inflation … of inflation ranges from minus the real rate of interest to numbers insignificantly above zero. Furthermore, we argue …