Laurence Ball, an economist at Johns Hopkins University, makes the case for shifting from a 2 percent inflation target to a 4 percent inflation target:

Suppose that central banks had been targeting 4% inflation in the early 2000s rather than 2%. Nominal-interest rates would have been two percentage points higher, allowing rates to fall by an extra two points before hitting zero. I estimate that this extra stimulus would have reduced average unemployment over 2010-2013 by two percentage points (Ball 2013).

Moreover, Ball argues that the supposed downsides of moderate inflation are greatly overstated. The main case against a somewhat higher inflation target seems to be that if we allow inflation to rise to 4 percent, it is all but inevitable that it will increase even further. Yet that is precisely the inflation target that had been in place during the Reagan-era economic expansion:

Central bankers have not always found 4% inflation unacceptable. Under Chairman Paul Volcker, the Federal Reserve ended the double-digit inflation of the 1970s, but it allowed the inflation rate to settle at about 4% from 1985 through 1988. This experience is often called the “conquest” of inflation (e.g. Sargent, 1999). Once inflation reached 4%, Volcker and his colleagues did not try to reduce it further. The Fed only tightened policy at the end of 1988, when inflation started rising again (Romer and Romer, 1994b).

Support for 2% inflation started to grow during the 1990s. Starting with Canada and New Zealand, many central banks adopted targets near 2% and pushed inflation to that level. In other countries, declines in inflation were partly accidental. In the United States, for example, inflation drifted down as a side-effect of recessions in 1990-91 and 2001. Once inflation reached 2% however, policymakers decided to lock in that rate for the long run.

Why do today’s central bankers oppose 4% inflation when Paul Volcker did not? The answer is not that research has identified new costs of inflation. Instead, policymakers have developed an aversion to inflation that is out of proportion to its true costs. [Emphasis added]

Ball attributes this excessive caution to the tendency of economic policymakers to fight the last war as well as to research which suggests that that central banks need to be ultra-hawkish to avoid a dynamic consistency problem. The experience of the Volcker era suggests that this latter concern is misplaced.