That’s why some economists propose aiming for a higher rate of inflation, anticipating that this would provide a greater safety margin to the interest rate floor.
6/8  BIS central bankers' speeches  But there are side-effects and risks associated with raising the target inflation rate, something which the Bundesbank highlighted at length in its June Monthly Report this year.19 At this point, let's bear in mind the vital importance of firmly anchored inflation expectations for effective monetary policy. Putting up the inflation target causes inflation expectations to shift.