Thus, the Bank aims at an economy in which prices rise moderately, as economic activity becomes more dynamic through increases in firms' sales and fixed investment as well as improvement in households' employment, wages, and consumption.
An economy in which a virtuous cycle among prices, wages, and economic activity continues to operate would create a world in which the price stability target of 2 percent is achieved. B. Why Are Prices Sluggish? However, we are still halfway toward achieving the price stability target of 2 percent.