This specification reflects the fundamental insight that price stability is conducive to sustainable economic growth, job creation, prosperity and social stability. This insight has been established by historical evidence in Europe, it has been widely accepted in policy circles and confirmed by a large number of academic studies. Why is price stability crucial?
•  Price stability allows people to concentrate on productive activities rather than on strategies to protect their wealth and income against inflation. This is of particular benefit to the weakest groups of society, which have only limited possibilities for hedging against inflation. In this sense, price stability also makes an important contribution to social stability.