Then there's the small matter of central bank credibility. Everything we hear and read about central banking today emphasizes the importance of communicating objectives clearly in order to influence the public's expectations and behavior.
Why would central bankers, who have fought hard to earn credibility with financial markets, forgo that trust for short-term gains? And why would we believe anything they ever told us again?
"It's a slippery slope," said Marvin Goodfriend, professor of economics at Carnegie Mellon University and a former research director at the Federal Reserve Bank of Richmond. It introduces the idea that if the central bank were willing "to do something for short-term purposes today, it would do it again for short-run purposes."
Mankiw, also via email, offered a different argument to support the idea.
"Think of it as the Fed announcing it will keep future short rates lower, for any given inflation rate, than it otherwise would have," he said.
The long-term rate is the sum of the current and future expected short-term rates. That's an arithmetic calculation.
A potential buyer of a 10-year Treasury note, for example, will earn a certain return from rolling over a short-term rate for 10 years. In order to induce him to lock in for a 10-year period, he would need to earn the expected short-term rate for 10 years plus a term premium, or compensation for accepting the interest-rate risk during that period.
In theory, Mankiw is right. Ceteris paribus - Latin for "with other things equal" and the fallback for all things economic - the longer the Fed is expected to hold the overnight rate at zero, the lower the implied long-term rate.
But other things aren't equal; they never are. In an econometric model, maybe, the central bank can target higher inflation for two years without affecting nominal long-term rates.
In the real world, bond investors are going to look at 6 percent inflation and project 8 percent or 10 percent.
Nominal bond yields will rise to incorporate higher inflation expectations. Real yields might not rise, but it's unlikely they would fall. And long-term rates are what matter for capital
investment, which is key to increasing the economy's growth potential and raising productivity.
Bad ideas never die. Just this week in a blog post, economist Noah Smith advocated higher inflation - 4 percent or 5 percent - for the next decade. The only downside to higher inflation, he wrote, is the "nuisance cost" of changing prices.
Not to worry. The idea of raising the inflation target "has no traction among central bankers," Goodfriend said.
That won't stop academics, who are enthralled with an idea that looks good on paper. However, it's a comforting thought to those of us who live outside the ivory tower.
Baum is a Bloomberg View columnist.