system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why is inflation necessary in a normally functioning economy?
gpt
It isn't "necessary." Central banks around the world, especially in the past three decades, have chosen to target low, but positive, inflation rates. There is no law of nature forbidding them from targeting 0% average inflation. A small positive average inflation rate has been judged to be an appropriate stance that balances several forces. Some considerations lead us to favor an average inflation rate of 0%, while other considerations might lead us to favor an average inflation rate of 4% or even higher. Most central banks split the difference and target 2% average annual inflation.