The adoption of price-level targeting, however, could help central banks deal with the zero-bound constraint. So let me now turn to the topic of price-level targeting. A target for the price-level path?
The essential difference between a target for the price level (which could rise over time) and an inflation target is that under pure inflation targeting, past deviations from the target do not have an impact on the future targeted rate of inflation. Movements in the price level that are perceived to be "one-off" events are ignored. Bygones are bygones.