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Some observers argue that the mandate of the Federal Reserve Bank should be changed to prioritize the control of inflation over other goals.This is argued because hyperinflationis created by central banks raising the money supply at a rate far in excess ofthe growth rate of real GDP. A high rate of inflation causes money to lose its value so quicklythat firms and households avoid holding it.Also, economies suffering from high inflation usually alsosuffer from very slow growth, if not severe recession.

This was seen in 1913 during economic hardships of The Great Depression, congress passed the Federal Reserve Act to stabilize the economy and better control inflation rates as well as manage the money supply and interest rates.

Inflation targeting is a model for conducting monetary policy that involves the central bank announcing its target level of inflation.Those who support inflation targeting argue that announcing a target draws public attention to what the federal government can accomplish in practice and provides a baseline for inflationary expectations. Proponents also argue that inflation targets promote accountability for the Fed.

Those opposing targeting are concerned that numerical targets minimize the Fed's flexibility to address other goals. Because monetary policy affects inflation with a lag, targeting requires the Fed to use predictions of inflation that could not be accurate. Additionally, inflation targets may increase doubt over whether the Fed will take prompt action to return the economy to full employment following a recession.Finally, critics claim that holding the Fed accountable for a goal of low inflation can make it more difficult for elected officials to monitor the Fed's support for good overall economic policy.

The Bank of Japan, as the central bank of Japan, decides and implements monetary policy with the aim of maintaining pricestability, thereby contributing to the sound development of the national economy.Price stability is important because it provides the foundation for the nation's economic activity. In a market economy, people and firms make decisions on whether to consume or invest, based on the prices of goods and services. When prices shift, individuals and firms find it challenging to make appropriate consumption and investment decisions, and this can hinder the efficient allocation of resources in the economy. Unstable prices can also distort income distribution.