That’s one reason why the Governing Council of the ECB has defined price stability as an inflation rate of below, but close to 2%. Moreover, changing the definition of price stability could damage the credibility of monetary policy. The public might begin to expect the target to be increased further in the future to create shortterm stimulus.
This might raise inflation uncertainty and cause inflation expectations to become unanchored.8 It would also be wrong to lower the inflation target, as some have occasionally called for. At the end of the day, inflation is a monetary phenomenon and there is no evidence of a structural break in the factors driving inflation. It is therefore inflation that has to move, not the target.