If you want all countries to be able to "exploit comparative advantages" you need enough investment in those countries. If a lot of investment in those countries have a risk adjusted real return below -2%, your inflation target of "below 2%" makes fiat money price these investments out of their markets. It's as simple as that.

It seems that sometimes people see negative returns as unnatural aberrations. This might be because the 20th century had unprecedented technological and demographic growth which made low risk positive returns easy to find.

The law of thermodynamics tells us that most things decay over time unless you input work and energy into them. Widely available low risk positive real return investments may be a thing of the past. We should not let overvalued fiat price out the type of investment that may be emerging as a crucial part of the savings market. A restrictive monetary stance like there is currently in the EU amounts to subsidizing the removal of investment from the real economy and parking money into fiat. Excess idle fiat has a return of -100% for the economy over the period that it is parked. -3 or -4% real return investments would be a huge improvement to the economy if they were allowed to exist.

Of course cash holders don't see that -100% return since if the central bank maintains prices below their target, cash savers get to keep their claim on other people's wealth even if they didn't participate in creating or maintaining this wealth. This means that later, when people want to draw down their cash savings and the idle money starts moving, central banks will have two choices. They can let prices correct upwards, devaluing excess cash savings (which were not backed by any real value anyways) or they can, and this is their stated actual goal, maintain the illusion and instead use a tight monetary stance which devalues the savings of those who invested in the real economy.

We often hear economic debates where the idea of people not saving enough is pitted against people saving too much. This is a false dichotomy. It is possible to spend and save at the same time. If I buy something that I will need later and don’t consume it now, I am buying and saving at the same time. If I invest in a company so they can build a new factory to raise production later, I am buying a factory, employing engineers and builders and amassing capital at the same time. If people do it because of higher than normal inflation and they are on average only getting something like a real minus 5% returns instead of a fictitious minus 2%, they are really raising average wealth creation from almost 0% to near 95% of the value of excess dollars that would have stayed idle otherwise.

One of monetary policy’s main function can ultimately be seen as making people’s savings flow all the way to the real economy. The point of increasing demand through inflation is not to hurt savers, it is to help them save in things that are real and that won’t result in their wealth being devalued later.

The free-market advocates out there who often seem afraid of inflation should understand that propping up intrinsically valueless cash so that it artificially keeps its value better than private stores of value is the government interfering, market distorting option. Letting fiat consistently devalue enough to be closer to its intrinsic value of nothing, and allowing private stores of value such as stocks, bonds, commodities etc. to take its place is the free-market way. It puts people to work, gives everyone better paying jobs and creates more wealth.

Money doesn't have intrinsic value and it shouldn't be made to seem like it is too valuable by governments or central banks. It should be made valuable and stable enough to allow for low friction, low cost transactions but not enough to create gridlocks in investment and labor markets.