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

3% is notable because it’s 1% above the 2% target. (Sort of like how going 65 mph is only bad because it’s 5 mph above the 60 mph limit.)