Clarifying the debate about deflation concerns

Mickey Levy, 21 February 2014

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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.

Topics: Global crisis, Monetary policy
Tags: deflation, disinflation, Europe, eurozone, Japan, quantitative easing, US

Deflation, debt, and economic stimulus

Richard Wood, 3 March 2011

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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.

Topics: Macroeconomic policy, Monetary policy
Tags: deflation, Economic stimulus, fiscal stimulus, quantitative easing

Hire Irving Fisher!

Enrique G. Mendoza, 12 February 2009

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Topics: Global crisis, Macroeconomic policy
Tags: debt, deflation, financial crisis, Great Depression

Deflation or disinflation?

Robert Ophèle, 11 February 2009

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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.

Topics: Monetary policy
Tags: deflation, disinflation, France

Deflation or stagflation in the Eurozone?

Sylvester Eijffinger, 15 January 2009

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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.

Topics: Monetary policy
Tags: deflation, inflation, interest rate lower bound, monetary decision-making

US price deflation on the way

John Muellbauer, Janine Aron, 10 October 2008

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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.

Topics: Macroeconomic policy
Tags: deflation, inflation forecasting

Back to the ‘Thirties with a Twist

Barry Eichengreen, 30 August 2008

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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.

Topics: Economic history, Monetary policy
Tags: deflation, monetary policy, subprime crisis, US

How bad is deflation in Japan?

David E. Weinstein , Christian Broda , 22 October 2007

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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.

Topics: Monetary policy
Tags: CPI, deflation, Japan

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