It could also lead to more-volatile inflation over the longer run and therefore higher inflation risk premiums in nominal interest rates. It is notable that while the economic arguments for raising inflation targets are well understood, no major central bank has raised its target in response to the recent financial crisis.
Another approach to this problem is for central banks to target a gradually rising price level rather than a constant inflation rate. Imagine a plot of the consumer price index (CPI) from today onward increasing 2 percent each year. Central banks would commit to adjusting policy to keep the CPI near that line.