I’ve read that many banks want a certain level of inflation and I don’t really see why. Why is important to banks that a stable product costs more tomorrow than today?
Is it to make people spend their money more since storing it will eventually make is worth less?
In: Economics
The answers here are wrong, it is not to encourage spending. I would encourage anyone to ask questions on /r/AskEconomics, where there is actually high quality standards.
An economist wrote a longer, more complicated explanation [here](https://pastebin.com/p0AEbSnS). The basic ELI5 is that there are several competing factors, and about 2% per year (what most developed countries target) is a decent compromise between those factors. I wish I can write an ELI5 of some of those factors if anyone really wants, but it’s going to get pretty long and likely can’t fit within an ELI5 level.
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