A Cost-Benefit Analysis of Going from Low Inflation to Price Stability in Spain

One of the most significant economic developments of recent years in industrialized countries has been the increasing orientation of macroeconomic policies - and of monetary policies in particular - to achieving lower inflation rates. This has led to a move from low inflation to price stability in a number of countries and, in particular, in Spain. The purpose of this paper is to provide some empirical evidence on the net economic gains that have been obtained in the case of Spain from achieving inflation rates which are low enough to be considered consistent with a situation of price stability.