Stabilność cen – właściwy cel polityki monetarnej?
Price stability: The proper objective of Monetary Policy?

Summary/Abstract: This theoretical study aims to analyze price stability as the dominant final goal of monetary policy. The analysis is carried out from the point of view of the Austrian school theory. The study applies the deductive reasoning method, using the verbal logic in the theoretical analysis of the complex processes in the economy. Mainstream economic schools agree that price stability, defined as a low inflation rate, is the central banks’ main objective in the long term. The optimal annual inflation rate should be in the range of 2–3 per cent, since too high and too low inflation leads to economic and social costs exceeding its benefits. The central bank’s struggle for price stability is criticized by Austrian economists who argue that the decline in prices is a natural consequence of the economic development. This decline results from increasing factor productivity. Monetary policy aimed at maintaining low inflation leads to recurring periods of economic expansion and crisis. Moreover, persistent inflation makes it impossible for all members of the society to benefit from lower prices.

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