Should-Read: Nick Bunker: Time for the Fed to look beyond 2 percent target inflation?: "The idea that a stable and credible inflation target must be 2 percent is an accident of history... http://equitablegrowth.org/equitablog/value-added/time-for-the-fed-to-look-beyond-2-percent-target-inflation/
...a figure “plucked out of the air” in New Zealand more than a quarter century ago and which has since been adopted by other high-income countries, including the United States. Inflation this low may have been a positive development in the past, but it presents problems now. With nominal interest rates so low, a 2 percent inflation target limits how low inflation-adjusted, short-term interest rates can go. Josh Bivens of the Economic Policy Institute argues persuasively that a higher inflation target would make monetary policy more effective the next time interest rates need to be slashed to cope with the next U.S. economic downturn...
