Commentary 
For most economists and politicians, the role of central bank authorities is to make the economy as stable as possible. What do they mean by economic stability? Economic stability refers to an absence of excessive fluctuation, so an economy with constant output growth and low and stable price inflation is likely to be regarded as stable.
An economy with frequent boom-bust cycles and variable price inflation would be considered unstable. According to popular thinking, a stable economic environment in terms of stable price inflation and stable output growth acts as a buffer against various shocks. This makes it much easier for businesses to plan. In this way of thinking in particular, price level stability is the key for economic stability….