14 This idea has been universally rejected by the central banking community, however, which argues that the costs incurred through lost credibility as well as higher and more uncertain inflation would far outweigh any prospective benefits. 15 Low, stable, and predictable inflation, it is generally agreed, is the most important contribution that central banks can make to the economic well-being of a country.
Price-level targeting Interest in the potential advantages of price-level targeting has, if anything, increased following the crisis. The automatic stabilization properties that might result from committing to a price-level target could reduce the probability of hitting the zero bound, thereby allowing central banks to aim for a lower target path, and make monetary policy more effective once it was reached.