Money & WorkFact
Why the ECB wants inflation, just not too much of it.
The European Central Bank aims for 2% inflation over the medium term, not 0%. A small buffer prevents prices from falling across the board during a downturn: in deflation buyers wait, companies sell less and cut jobs. The target is symmetric, so well below 2% is considered as undesirable as well above it.
Useful: When you hear inflation is at 2%, that's the central bank's plan, not an alarm.
Source: ecb.europa.eu