A common theme among many economic policymakers, financial market participants, and the media is that rich industrialised nations face a high risk of deflation, and that deflation always harms economic performance and so must be combatted with aggressive macroeconomic stimulus. Such broad assessments are misleading, and under certain circumstances may lead to misguided policies.
Clarifying the debate about deflation concerns
Mickey Levy, 21 February 2014
Deflation, debt, and economic stimulus
Richard Wood, 3 March 2011
The US, Japan, and Ireland are suffering from deficient private demand, rising debt, and a tendency to deflation. This column asks what can be done about it.
Hire Irving Fisher!
Enrique G. Mendoza, 12 February 2009
Deflation or disinflation?
Robert Ophèle, 11 February 2009
Inflation refers to a sustained increase in the general price level in an economy. It is not an instantaneous shock limited to the prices of certain goods. It is a persistent and general process.
Deflation or stagflation in the Eurozone?
Sylvester Eijffinger, 15 January 2009
Assessments of European price stability risks outright reversed in recent months.1 Until summer 2008, monetary policy was concerned with inflation pressures from surging commodity and energy prices. Last month, facing possible recession, the European Central Bank (ECB) cut interest rates by an unprecedented 75 basis points.
US price deflation on the way
John Muellbauer, Janine Aron, 10 October 2008
Fed minutes released on October 7 disclosed that as recently as Sept 16, Fed officials thought risks to growth and inflation were roughly equally balanced. And Federal Reserve Chairman Ben Bernanke acknowledged on the same day that though the inflation outlook had improved somewhat, it remained uncertain.
Back to the ‘Thirties with a Twist
Barry Eichengreen, 30 August 2008
One of the chief ways financial market participants make sense of events is by drawing parallels with the past. The subprime crisis, when it first erupted, was widely perceived as the most dangerous financial crisis since the 1930s. The implication was that it was critical to avoid the policy mistakes that transformed that earlier crisis into a macroeconomic disaster.
How bad is deflation in Japan?
David E. Weinstein , Christian Broda , 22 October 2007
On the face of it, Japanese deflation does not seem that severe. The latest monthly numbers suggest that over the past twelve months, the non-fresh food component of the CPI is falling at an annual rate of 0.1%. However, we believe that this number seriously understates deflation in Japan – maybe by an order of magnitude.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Cadot, de Melo, 16 June 2014