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What’s So Special About 2% Inflation?

The 2% inflation target is key to the Federal Reserve’s vision for stable prices. But, where exactly did this 2% inflation goal originate? New Zealand. In the late 1980s, the country faced high inflation when one economist proposed, ’Why don’t we just have an inflation target?” U.S. declared its 2% inflation target in 2012. Canada, Australia, Japan and Israel are among the many economies that include 2% in their inflation rate targets, according to the International Monetary Fund. Watch the video above to learn more about why some economists argue for changing the target, lower or higher, and whether it may change anytime soon. Produced by Andrea Miller Graphics by Christina Locopo Supervising Producer Lindsey Jacobson » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC #CNBC What’s So Special About 2% Inflation?