In other words, even if we accept that high or even moderate inflation is damaging, isn’t it possible that central banks which are excessively obsessive about achieving no inflation might actually be harming the economy and the society they claim to be helping?
This brings me to the second group of critics, who are concerned that in changing from 0 to 2 percent to 0 to 3 percent we have betrayed the intention of the Reserve Bank Act, requiring that monetary policy focus exclusively on delivering ‘stability in the general level of prices’.