Fed Should Target 'Stable' 3% or 4% Inflation: Nobel Laureate Romer

The transcript discusses the goal of achieving a 2% inflation rate and explores the possibility of targeting higher rates, such as 3% or 4%, as suggested by economists like Adam Posen and Olivier Blanchard. It addresses concerns about the potential for inflation to rise uncontrollably if higher targets are set. The speaker expresses a preference for stable inflation rates, suggesting that a stable 3% or 4% could be beneficial.

What is the current inflation rate target discussed in the video?

• 1% to 1.5%

• 2% to 2.5%

• 3% to 3.5%

• 4% to 4.5%

Which economist is associated with the idea of targeting a 3% inflation rate?

• Milton Friedman

• John Maynard Keynes

• Adam Posen

• Olivier Blanchard

What inflation rate did Olivier Blanchard discuss for a period?

• 2%

• 3%

• 4%

• 5%

What is a potential argument against targeting a higher inflation rate?

• It might stabilize the economy too quickly.

• It would decrease consumer spending.

• It could lead to deflation.

• It could escalate to even higher rates like 6% or more.

What stable inflation rate does the speaker suggest might be beneficial?

• 5%

• 2%

• 1%

• 3%