Even the models that we employ to quantify the additional benefits of a lower inflation target – models that aspire to an economist’s utopia – disagree on how material those benefits would be.
They must be able to work out how much profit they earn from their businesses, and estimate how much additional profit, if any, they will earn if they take out a business loan and then fully service that loan. Entrepreneurs must also have a good grasp of the risks that they run.