The ECB Governing Council has decided to change its inflation target. Previously, the central bank aimed to keep inflation “below, but close to, 2 per cent”. The “below but close” wording will be dropped in future, so that the ECB will now pursue a symmetrical 2 per cent inflation target. Proposals for formulations that explicitly set the target at an average inflation rate, on the other hand, have not gained acceptance. In addition, costs of housing, including for owner-occupied real estate, shall be more strongly taken into account in the measurement of inflation. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:
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