Eli5: The idea of inflation is headline news this week in the US. What is magic about a 2% inflation target as opposed to 3%?

Question

Is there some sort of mathematical reason behind this goal? Does 3% have some sort of long-term effects such that it becomes uncontrollable or something?

It seems like, inflation or not, places are just as busy (restaurants, Target/Wal-Mart, Costco, etc…).

In: Economics

Answer 1

Let’s not forget that part of it is government wants inflation so that their debt means less