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The ECB’s inflation target: flexible future

News from 2020-08-04 / KfW Research

The European Central Bank (ECB) is currently reviewing its monetary policy strategy. The central element in this process is the inflation target - in an environment of significantly lower rates of inflation than at the time the current target of "below, but close to, 2%" was set. We consider it particularly sensible to make the target more flexible, which would also allow inflation rates below 2% to be tolerated. Such a more flexible target would be compatible with the fulfilment of the ECB's mandate, would take account of the current new reality of low inflation, would give the ECB greater room for manoeuvre and, in perspective, would also make it easier for it to exit from its unconventional measures.

The ECB’s inflation target: flexible future  (PDF, 214 KB, non-accessible)

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Economic Research

Economic Research

Economic development in Germany and around the world, studies on topics relevant to society such as environmental and climate protection, demography, globalisation, innovation and sustainability, impact of KfW promotional programmes.

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