[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-325450-105":59,"doc-detail-325450-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","defending-zero-inflation-all-for-naught","Defending Zero Inflation: All For Naught","","A Federal Reserve economic commentary defending “zero inflation” as the overriding objective for price stability. It argues that a central bank can influence the price level in its currency over time, cannot control real output, and that credible commitment to inflation objectives can support efficiency and growth. The commentary challenges criticisms that zero inflation brings limited benefits and high transition costs, using a critics’ framework and references to conference analyses and the literature on taxation and optimal inflation.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/defending-zero-inflation-all-for-naught/325450/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/defending-zero-inflation-all-for-naught/325450.png","ImageObject",300,407,{"name":92,"@type":93},"Aria","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-23","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":34},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What are the three core beliefs supporting the advocacy of price stability?","Question",{"text":112,"@type":113},"First, a central bank can control the price level over time but not the growth of output. Second, credible commitment to an inflation objective enables efficiency and growth. Third, price-level stability (zero inflation) is superior to stabilizing the inflation rate.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How do critics frame the argument against a zero-inflation target?",{"text":117,"@type":113},"They argue that (1) the advantages of zero inflation are small and (2) the transition costs from a positive inflation trend to zero outweigh the benefits.",{"name":119,"@type":110,"acceptedAnswer":120},"What role does taxation play in the discussion of optimal inflation?",{"text":121,"@type":113},"Tax “frictions” are used in optimal inflation models, where research such as Friedman (negative optimal inflation) and Phelps (possibly positive under welfare-distorting taxes) shapes how inflation’s welfare effects compare to revenue raised through other sources.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},325450,1790465146,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":34,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},2336464648322,"https://ap-avatar.wpscdn.com/avatar/2200025388227c56fec?_k=1778556882303663488","by W.Lee Hoskins  \nDuring th pastsveral yeas.Ihve  \nspent a considerable amount of time pro-moting price stability as the overridingobjective for the Federal Reserve Sys-tem.In this Economic Commentary.Iwould like to discuss some of the criti-cisms that this position has generated,torespond to those criticisms,and to com-ment on a conference that the FederalReserve Bank of Cleveland held lastyearon the subjectof price stability.  \nBriefly put,my advocacy of pricestability stems from three deeply heldbeliefs.The first is that a central bankcan,over time,control the price levelof goods and services denominated inits own currency,but it cannot controlthe growth of output (potential oractual).The second is that a crediblecommitment to an inflation objectiveenables a central bank to promote eco-nomic efficiency and growth(potentialand actual).And the third is that price-level stability,popularly called zero in-flation,is superior to inflation-ratestability.  \nAmong economists,support for myfirst assertion is nearly universal.There is also widespread agreement onthe second point.I find it is the lastproposition that is most contentious,particularly when people attempt tocompare the costs of achieving pricestability to the costs of stabilizing theinflation rate at the status quo.  \nApril 1.1991  \n# Defending Zero Inflation:All For Naught\n\nPerhaps the best place to begin is tocal your attention to the Summer 1990issue of the Federal Reserve Bank ofMinneapolis'Quarterly Review,whichcontains an article entitled\"Deflatingthe Case for Zero Inflation.\"The essay,by Rao Aiyagari,is well written andsummarizes some common opinionsabout the costs and benefits of stabiliz-ing the price level.The author has per-formed a valuable service by reviewinga portion of the relevant literature onthis subject,and through referencinghis work,I am also responding tocriticisms I hear from many others.  \nCritics of zero inflation believe thatthe Federal Reserve System shouldtarget some other inflation rate,since,in their view,the benefits of achievingzero inflation would be outweighed bythe costs of getting there.In a recentspeech,Federal Reserve Bank ofCleveland President W.Lee Hoskinsdefended his continuing advocacy ofzero inflation as the System's over-riding objective.  \nAiyagari concludes that the benefits ofbeing at zero inflation are small com-pared to the costs of getting there,andthat most of the costs associated withnonzero average rates of inflation canbe adequately addressed by adopting in-stitutional changes that do not requirespecific inflation targetsI think hisconclusions are unwarranted.And,asmuch as Ilike his article,I believe thatif it is not read careflly it could givethe false impression that economistshave already decided that the costs ofachieving price stability exceed thebenefits that would result.  \n## ■ The Critics'Framework\n\nThere are two dimensions to my critics'argument that the cost of pursuing azero-inflation target would outweighthe benefits of reaching that target.Thefirst is that the advantages of achievingzero inflation are small.The second  \ndeals with the costs of moving from a5percent trend rate of inflation to a zero-inflation world.This is the transition-cost argument,which essentially saysthat even if zero is the place to be,get-ting there is not worth the ride.  \nTypically,the economic models thatare used to do optimal inflation analy-sis have few,ifany,real-world fric-tions.Markets are assumed to clearcontinuously and costlessly,informa-tion is free,and expectations—if theyplay any role at all—are rational.Money has few effects on the realeconomy in such a world,so it is notsurprising that the benefits of zero infla-tion in this scenario are small.Peoplemerely plan on the nominal values oftransactions changing predictably overtime.If money doesn't matter much forthe performance of the nonfinancialeconomy,then what the monetaryauthorities do to money is of little im-portance.  \nLast November,we held aconferenceat the ","cbCaii6x5hoLNwJR","https://ap.wps.com/l/cbCaii6x5hoLNwJR","pdf",1230401,"English","# Defending Zero Inflation: All For Naught\n## The Critics' Framework\n## Inflation and Taxation","[{\"question\":\"What are the three core beliefs supporting the advocacy of price stability?\",\"answer\":\"First, a central bank can control the price level over time but not the growth of output. Second, credible commitment to an inflation objective enables efficiency and growth. Third, price-level stability (zero inflation) is superior to stabilizing the inflation rate.\"},{\"question\":\"How do critics frame the argument against a zero-inflation target?\",\"answer\":\"They argue that (1) the advantages of zero inflation are small and (2) the transition costs from a positive inflation trend to zero outweigh the benefits.\"},{\"question\":\"What role does taxation play in the discussion of optimal inflation?\",\"answer\":\"Tax “frictions” are used in optimal inflation models, where research such as Friedman (negative optimal inflation) and Phelps (possibly positive under welfare-distorting taxes) shapes how inflation’s welfare effects compare to revenue raised through other sources.\"}]","Defending Zero Inflation: All For Naught | PDF",1789970545,13]