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Optimal Inflation Rate: A Meta-Analysis

Author

Listed:
  • Opatrny, Matej
  • Opatrny, Martin
  • Havranek, Tomas
  • Irsova, Zuzana
  • Hampl, Mojmir

Abstract

We revisit the optimal long-run inflation rate using 777 estimates from 116 primary studies published between 1989 and 2026, the largest sample assembled to date. To our knowledge, this is among the first meta-analyses in economics whose primary-data extraction is performed end-to-end through a documented and auditable large-language-model pipeline, calibrated against a hand-coded training set and released for replication. Across publication-selection and selection-on-significance diagnostics that are applicable in this calibration-dominated corpus, the literature points to an optimum of roughly 0.6 percentage points per year, well below the two-percent targets commonly used by advanced-economy central banks. Bayesian model averaging over the full structural-moderator schema shows that cross-study variation is driven by genuine modelling choices, the choice of monetary benchmark (Friedman rule vs. laissez-faire), the transactions-frictions technology, the assumed shock structure, and the class of nominal-rigidity contract, rather than by selective reporting.

Suggested Citation

  • Opatrny, Matej & Opatrny, Martin & Havranek, Tomas & Irsova, Zuzana & Hampl, Mojmir, 2026. "Optimal Inflation Rate: A Meta-Analysis," CEPR Discussion Papers 21629, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21629
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    File URL: https://cepr.org/publications/DP21629
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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