Solar NewtSources and credits
Who Decided Inflation Should Be 2%
Every large central bank in the rich world aims at 2 percent inflation, the number your raise and your mortgage are measured against. The video asks who chose 2, and why nobody can change it. This page lists every source behind the video's claims and credits every piece of footage, image, sound and music in it.
Figures are dated in the video and below. Snapshot numbers were current when the video was locked in September 2026 and will move.
Chapters
- 0:00A minister on the evening news, 1988
- 1:14Link 1 · When inflation had no number
- 2:50Link 2 · Zero to two by '92
- 5:27Link 3 · The contract everyone copied
- 8:23Link 4 · Would 2 have happened anyway?
- 11:15Link 5 · The number in your week
- 13:31The verdict
- 14:02Why nobody will change it
- 14:53What comes next
Sources (84)
Grouped by the part of the story they support. Where a figure is an estimate, a model result or one person's account, the video says whose it is: Brash's recollections, the Fed's and Akerlof's simulations, Hanke's hyperinflation estimates and the independent Turkish figures are all attributed rather than stated as fact. No recording of the April 1, 1988 broadcast was located; the moment is carried by the Reserve Bank's own account.
Before any country had an inflation number
- Federal Reserve History, "Creation of the Bretton Woods System"
- Beyer, Gaspar, Gerberding and Issing, "Opting Out of the Great Inflation: German Monetary Policy After the Break Down of Bretton Woods," ECB Working Paper 1020, March 2009, Table 3.1 (the Bundesbank's money targets and assumed price rise, from its Monthly and Annual Reports)
- Gerberding, Worms and Seitz, Deutsche Bundesbank Discussion Paper 25/2004, Table 6
- Clarida and Gertler, "How the Bundesbank Conducts Monetary Policy," in Reducing Inflation, NBER / University of Chicago Press, 1997
- Kiley and Mishkin, "The Evolution of Inflation Targeting from the 1990s to the 2020s," Federal Reserve Board FEDS 2025-025 (also on Canada's path and on Ball and Sheridan, 2005)
- Federal Reserve History, "Volcker's Announcement of Anti-Inflation Measures" (quoting the Board's 65th Annual Report, 1979)
- Bank of England Quarterly Bulletin, March 1981, economic commentary
- U.S. Bureau of Labor Statistics, CPI-U, series CUUR0000SA0
- Office for National Statistics, series CZBH (retail prices)
- Board of Governors, H.15 federal funds rate (FRED series FEDFUNDS); BLS unemployment rate, series LNS14000000
- Alan Greenspan, testimony to the Senate Banking Committee, February 21, 1989 (FRASER)
- Reserve Bank of New Zealand, "The Reserve Bank and New Zealand's economic history"; McDermott and Williams, RBNZ speech, April 12, 2018
- Stats NZ consumers price index via Reserve Bank of New Zealand table M1
- Reserve Bank of New Zealand, table B1, New Zealand dollar exchange rate changes before 1985
- OECD consumer price inflation, New Zealand, OECD total, West Germany and others (compiled from national sources)
New Zealand, 1988 to 1992
- Michael Reddell, "Origins and early development of the inflation target," Reserve Bank of New Zealand Bulletin 62(3), September 1999 (quoting the June 1988 Bulletin, RBNZ memoranda 2536 and 2537 of July 1988, the August 1989 file note and The Dominion of October 10, 1990)
- Don Brash, "Inflation targeting 14 years on," RBNZ speech, January 5, 2002 (text as published on donbrash.com)
- Don Brash, "Practical Experiences in Reducing Inflation: The Case of New Zealand," in Bordo and Orphanides (eds), The Great Inflation, NBER / University of Chicago Press, 2013
- Murray Sherwin (RBNZ), "Inflation targeting: 10 years on," address to the New Zealand Association of Economists, July 1999; Don Brash, "Inflation targeting in New Zealand, 1988 to 2000," RBNZ speech, February 9, 2000
- Don Brash, interviewed by Jon Hartley, Capitalism and Freedom in the 21st Century, episode 66 (Hoover Institution), transcript
- Arthur Grimes and Don Brash, NPR Planet Money / Morning Edition, transcript, December 6, 2018
- Reserve Bank of New Zealand Act 1989 (Public Act 1989 No 157), sections 8 and 9
- Reserve Bank of New Zealand, Policy Targets Agreements 1990 to 2018 (the first agreement, signed March 2, 1990 by David Caygill and Don Brash); RBNZ, "History of the Remit and Policy Targets Agreement"
- Stats NZ, Household Labour Force Survey, unemployment rate (series HLFQ.S1F3S)
- Reserve Bank of New Zealand, table B2, wholesale interest rates (overnight cash rate), quarterly means
- Federal Reserve Bank of Minneapolis, The Region, "Interview with Donald Brash," June 1, 1999
The copying, and the Fed's closed room
- Bank of Canada, "The Canadian Experience with Targets for Inflation Control," 1998; Bank of Canada Review, March 1991
- Mervyn King, "Twenty years of inflation targeting," Stamp Memorial Lecture, London School of Economics, October 9, 2012
- HM Treasury and Bank of England, annex "The New Inflation Target," December 10, 2003
- Sveriges Riksbank, "The Riksbank's inflation target: clarification and appraisal," 1999
- Reserve Bank of Australia, Statement on the Conduct of Monetary Policy, August 14, 1996
- European Central Bank press releases of October 13, 1998 and May 8, 2003, and the monetary policy strategy statement of July 8, 2021
- Federal Open Market Committee, transcript of the meeting of July 2 and 3, 1996 (pp. 51 and 72), released under the five-year rule
- Federal Reserve, Statement on Longer-Run Goals and Monetary Policy Strategy (first adopted January 2012)
- Federal Reserve press releases of August 27, 2020 and August 22, 2025 (the framework reviews)
- Bank of Japan, statement of January 22, 2013 (the 2 percent price stability target; a 1 percent goal from February 14, 2012)
- Swiss National Bank, monetary policy strategy
- Norwegian Ministry of Finance, letter 16/2722, "Modernisation of the Monetary Policy Regulation," February 21, 2018, and press release "New regulation on monetary policy," March 2, 2018
- Czech National Bank, "History of the CNB's inflation targets"
- Reserve Bank of India, monetary policy framework; South African Reserve Bank, monetary policy
- IMF, Annual Report on Exchange Arrangements and Exchange Restrictions 2023, Table 5
- Zhongxia Zhang, "Inflation Targeting Dataset: Inflation Targets, Bands, and Track Records," Data in Brief, 2025 (41 targeting central banks at the end of 2024, 9 of them at exactly 2)
- Stanley Fischer, "Why Are Central Banks Pursuing Long-Run Price Stability?", Federal Reserve Bank of Kansas City symposium, Jackson Hole, August 1996
- Advisory Commission to Study the Consumer Price Index (the Boskin Commission), Final Report, Senate Finance Committee Print 104-72, December 1996
- Reifschneider and Williams, "Three Lessons for Monetary Policy in a Low Inflation Era," Federal Reserve Board FEDS 1999-44, Table 1
- Akerlof, Dickens and Perry, "The Macroeconomics of Low Inflation," Brookings Papers on Economic Activity 1996:1
- Arthur Okun, April 1969, as quoted in J. Bradford DeLong, "America's Peacetime Inflation: The 1970s," NBER / University of Chicago Press, 1997
Would 2 have happened anyway?
- Robert Hetzel, Federal Reserve Bank of Richmond Economic Quarterly, Spring 2002 (on dating the Bundesbank's 2 percent)
- Alan Greenspan, statement to the Subcommittee on Domestic Monetary Policy, House Banking Committee, October 25, 1989 (FRASER)
- Ben Bernanke, "On inflation targeting," Reserve Bank of New Zealand conference "35 Years of Flexible Inflation Targeting," Wellington, March 6, 2025
- Blanchard, Dell'Ariccia and Mauro, "Rethinking Macroeconomic Policy," IMF Staff Position Note SPN/10/03, February 2010; Laurence Ball, IMF Working Paper 14/92, June 2014
- The 2022 to 2023 case for 3 percent: Olivier Blanchard (Financial Times, November 28, 2022), Jason Furman (Wall Street Journal, 2023) and Mohamed El-Erian (Marketplace, August 3, 2023)
- Transcript of Chair Powell's press conference, December 14, 2022
- Bank of Canada, "Renewal of the Inflation-Control Target: Background Information," November 2011
- Bank of England Act 1998, section 12 (who sets the UK target)
- The 2022 overshoot: BLS, The Economics Daily, July 18, 2022; Eurostat release 130/2022; ONS consumer price inflation, October 2022; FOMC statement of July 26, 2023
- Jerome Powell on retiring the word "transitory," Senate Banking Committee hearing, November 30, 2021 (video)
- Eurostat, HICP annual average rates (prc_hicp_aind), euro area; Kawamoto and Nakahama, Bank of Japan Working Paper 17-E-10, 2017
- Neil Irwin, "Of Kiwis and Currencies: How a 2% Inflation Target Became Global Economic Gospel," The New York Times, December 21, 2014 (shown as an example of how the story is retold, lede only)
The number in your week
- U.S. Bureau of Labor Statistics, Consumer Price Index news release, August 2026 data
- Bureau of Economic Analysis, Personal Income and Outlays, July 2026 (PCE price index); PCE price index via FRED (series PCEPI)
- Federal Reserve Board, board membership; FOMC statement of July 29, 2026
- Eurostat flash estimate of September 1, 2026; European Central Bank, monetary policy decision of September 10, 2026
- Office for National Statistics, consumer price inflation bulletin (and series D7G7); Bank of England, Bank Rate
- Statistics Bureau of Japan, monthly CPI; Bank of Japan, statement of July 31, 2026
- Stats NZ CPI release, June 2026 quarter; Reserve Bank of New Zealand, OCR decision of September 2, 2026
- Swiss Federal Statistical Office, release of September 3, 2026; Statistics Sweden flash, September 7, 2026; National Bureau of Statistics of China, September 10, 2026
- BLS CPI Inflation Calculator (what $100 of January 2012 buys in August 2026)
- Social Security Administration, 2026 cost-of-living adjustment fact sheet
- Internal Revenue Service, IR-2025-103, tax inflation adjustments for tax year 2026 (Revenue Procedure 2025-32)
- Freddie Mac Primary Mortgage Market Survey; ten-year Treasury yield and ten-year breakeven inflation rate, via FRED (MORTGAGE30US, DGS10, T10YIE)
- BLS, Usual Weekly Earnings of Wage and Salary Workers, second quarter 2026
- FDIC, National Rates and Rate Caps
- U.S. Treasury, Monthly Statement of the Public Debt (inflation-indexed principal outstanding), Fiscal Data
- House of Commons Library, Benefits Uprating 2026/27, briefing CBP-10403 (the 2.5 percent floor in the triple lock)
When inflation misses by a lot
- Magyar Nemzeti Bank, 70 Years of the Forint: Road from Hyperinflation to Price Stability, 2016, Table 2
- Statistisches Reichsamt, Zahlen zur Geldentwertung in Deutschland 1914 bis 1923 (1925), bread price in Berlin
- Hanke and Kwok, "On the Measurement of Zimbabwe's Hyperinflation," Cato Journal 29(2), 2009, reproducing Reserve Bank of Zimbabwe and Central Statistical Office figures; Hanke and Krus, "World Hyperinflations," Cato Working Paper 8, 2012
- Banco Central de Venezuela, "Variaciones del INPC"
- INDEC, consumer price index releases, Argentina
- TURKSTAT, via the Turkish Ministry of Treasury and Finance, November 3, 2022; ENAG independent estimates; Central Bank of the Republic of Türkiye, press release of June 11, 2026
- IMF, World Economic Outlook database, April 2026 (inflation, Lebanon, Argentina, Venezuela, Japan and others); Banque du Liban decisions as summarized by Byblos Bank research
- Statistics Bureau of Japan, long CPI series (2015 base); Bank of Japan statements of January 29, 2016 and March 19, 2024
- Deflation elsewhere: BLS historical CPI-U (1932); Swiss Federal Statistical Office, January 8, 2016; Eurostat monthly HICP (prc_hicp_manr); IMF World Economic Outlook, Hong Kong
Credits
- Archival film"A Better Way" No. 161, U.S. Department of Agriculture, 1979, National Archives (16-BW-161), public domain. "When the Circuit Breaks: America's Energy Crisis," Part I, Concept Films, 1975, Prelinger Archives, public domain.
- Archival photographsPaul Volcker at a Senate hearing, 1983; Harris & Ewing typing pool and Treasury check machines; Library of Congress, public domain. Henry Morgenthau opening the Bretton Woods conference, 1944; the Zimbabwe 100 trillion dollar note, 2009; a savings passbook, Allentown National Bank, 1953; via Wikimedia Commons, public domain. Deutsche Bundesbank headquarters, Frankfurt, 2007, dontworry, CC BY-SA 3.0, and Reserve Bank of New Zealand building, Wellington, 2013, Clilly4, CC0, via Wikimedia Commons.
- PortraitsRoger Douglas, Robert John Tucker, CC BY 4.0. Don Brash, 2011, Moriori, CC BY-SA 3.0. David Caygill, 2013, Schwede66, CC BY-SA 3.0. George Akerlof, 2007, Yan Chi Vinci Chow, CC BY 3.0. All via Wikimedia Commons. Alan Greenspan, Janet Yellen, Ben Bernanke, Stanley Fischer and Jerome Powell, United States Federal Reserve, public domain.
- Documents shown on screenReserve Bank of New Zealand pages (the Policy Targets Agreements compendium, Reddell's Bulletin article and Sherwin's speech), Reserve Bank of New Zealand, CC BY 4.0. The Norwegian Ministry of Finance letter of 2018, Norwegian Licence for Open Government Data. The House of Commons Library briefing CBP-10403, Open Parliament Licence v3.0. ECB Working Paper 1020 (2009); the FOMC transcript of July 1996; Greenspan's testimony of 1989; the Reserve Bank of New Zealand Act 1989; the Fed press release of August 22, 2025; Fischer's Jackson Hole paper (1996); Brash's NBER chapter (2013); Bernanke's Wellington paper (2025); Hanke and Kwok, Cato Journal (2009); Magyar Nemzeti Bank (2016); The New York Times (2014), lede only. Shown briefly as evidence, each cited on screen.
- Aerial imageryGoogle Earth, imagery Vexcel Imaging US, Airbus; Landsat / Copernicus; Data SIO, NOAA, U.S. Navy, NGA, GEBCO: Wellington, Frankfurt and the European Central Bank.
- Stock footageStoryblocks, under license: Wellington, Frankfurt, London, Ottawa, Oslo, Tokyo and Washington footage, central-bank buildings, currency, gold, shopping, household-budget and port footage.
- MusicYouTube Audio Library: "Sarabande," Joel Cummins; "Wandering Soul," "Faultlines," "Panoramic Arrival" and "Across Seas And Lands," Asher Fulero; "On The Flip" and "Down The Rabbit Hole," The Grey Room / Density & Time.
- SoundWriting with an ink pen, stephan, via Wikimedia Commons, public domain. Title and end-card stings, tuesdaynight; tick, soundshelfstudio; paper slide, oxidvideos; whoosh, dragonstudio; camera shutter and cash register, Universfield; riser, u1pruylktlg; click and pop (Pixabay). Chalk, marker, stamp and camera shutter sounds, Freesound (86723, 68086, 6789, 44189, 6305). Page flip and static, YouTube Audio Library.