Why the 2% inflation target?

Look at the FRED graph of inflation.  U.S. has only had inflation lower than 2% basically once (early 1960s) in last 50 years.  The economy has done pretty well in that whole time period.  So why mess with success?  I think that is the intuition.
fredgraph

About mkevane

Economist at Santa Clara University and Director of Friends of African Village Libraries.
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