Inflation Targeting (2%) — Why Exactly 2%?
The United States, Korea, and Europe alike all set their central bank's inflation target at "2%," as if by prior agreement. Where on earth did this magical number come from?
What Is Inflation Targeting
Inflation targeting is a framework in which a central bank publicly sets a target — "we will keep the inflation rate at X%" — and conducts monetary policy accordingly.
Pinning the target to a number has the effect of "anchoring" people's inflation expectations at that level and stabilizing them. Today many central banks, including the U.S. Federal Reserve, the Bank of Korea, and the European Central Bank, share a 2% target.
New Zealand Did It First
The first country in the world to adopt inflation targeting was New Zealand. In 1990, the Reserve Bank of New Zealand (RBNZ) was given the legal mandate to lower the inflation rate into a 0–2% range, becoming the first central bank with an explicit inflation target.
There is an interesting anecdote. The governor at the time, Don Brash, later recalled that "that number (2%) was essentially plucked out of thin air." Even so, New Zealand met the target in December 1991, a year ahead of schedule, and as prices stabilized afterward, central banks around the world followed suit.
"2%" is less the product of precise scientific calculation and more a convention that settled in as a "reasonable buffer zone" — low and stable prices while avoiding the risk of deflation.
Why 2% and Not 0%
It is easy to think, "Wouldn't it be even better if prices didn't rise at all (0%)?" but central banks generally choose 2% rather than 0%.
There are two main reasons. First, if you set the inflation rate at 0%, even a slight stumble risks slipping into deflation (falling prices), and deflation makes the economy worse by causing people to postpone consumption. 2% is a buffer zone that avoids that risk.
Second, a little inflation gives room to adjust wages and interest rates, and leaves room to lower real interest rates when needed.
The U.S. Federal Reserve has explicitly targeted 2% since 2012, and the Bank of Korea since 2019.
よくある質問
Q. If prices exceed the target, do they always raise rates?
It is not mechanical. Most central banks aim to converge to the target "over the medium term." Even if prices temporarily overshoot or undershoot the target, they respond after judging whether the cause is temporary or persistent.
Q. Will the 2% target stay the same going forward?
2% has settled in as a long-standing convention, but academic debate continues over whether the target should be adjusted in an era of low growth and aging populations. For now, however, most central banks maintain 2%, and whether it will change cannot be stated for certain.
関連ページ
📋 結果は過去のデータに基づくものです。過去のリターンは将来のリターンを保証しません。
📋 本サービスは投資アドバイスではなく、投資を理解するための教育目的で提供されています。