In the wake of the crisis, however, a number of pundits have called for an increase in the inflation rate that central banks should aim for. These calls have originated from diverse sources spanning academia, policy circles and financial markets. 3 Proponents of this  2  Danmarks Nationalbank, Monetary Policy in Denmark, 3rd edition, Danmarks Nationalbank, Copenhagen, 2009.
3  In academia the recommendation for a higher inflation rate objective in a low nominal interest rate environment predates the current crisis, see P. Krugman, “It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap”, Brookings Papers on Economic Activity, 2, 1998, reformulated more recently in G. Eggertsson and P. Krugman, “Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach”, Quarterly  2  BIS central bankers’ speeches  approach argue that this is a way to provide more monetary policy stimulus to the economy when nominal short-term interest rates – the instrument typically employed by central banks – cannot be reduced further because they are at zero, or close to zero.