The most important contribution that a central bank can make to the economic well-being of households and businesses is the achievement and maintenance of price stability. This will not be sacrificed. The only question, as always, is whether it can be delivered in an even more effective and reliable manner. Bibliography Optimal rate of inflation Amano, R., S. Ambler, and N. Rebei. 2007.
“The Macroeconomic Effects of Non-Zero Trend Inflation.” Journal of Money, Credit and Banking 39 (7): 1821–38. Amano, R., T. Carter, and K. Moran. 2010. “Inflation and Growth: A New Keynesian Perspective.” Bank of Canada. Manuscript. Amano, R., K. Moran, S. Murchison, and A. Rennison. 2009. “Trend Inflation, Wage and Price Rigidities, and Productivity Growth.” Journal of Monetary Economics 56 (3): 353–64.