What Should the Inflation Target Be? Views from 600 Economists

Abstract

<p>We surveyed more than 600 economists worldwide on their views about the central bank inflation target and other related monetary policy issues. Most respondents prefer their central bank to have an explicit inflation target, and roughly half want the central bank to keep its current target. Conditional on supporting a change, the preference is two to one in favor of raising the current target. Respondents who are worried about the central bank credibility are less likely to support a target raise. Conversely, preference for a target raise is more likely to come from those who are concerned about the effective lower bound on monetary policy rates. Only a quarter of the respondents would increase the inflation target following a permanent decline of the equilibrium real interest rate. Most respondents prefer the central bank to have also other objectives than just price stability.<br></p>