The Deflation Bogeyman

Deflation and Democracy

Deflation Doldrums?

Inflation or Deflation?

The Second Great Contraction

The experience of deflation is well entrenched.

Can China Avoid Deflation?

The Great Contraction of 2008 2009

Can China Beat Deflation?

Why Deflation is Good News for Europe

Deflation in many advanced economies.

Deflation, on the other hand, increases debt, and feels like being smothered by a lead blanket.

If prices fall at a rate of 1 , could they fall at a rate of 10 ?

Deflation that emanates from the financial sector is lethal.

Deflation discourages optimism about the future.

Has Global Stag Deflation Arrived?

This contraction has become even more severe since then.

Fiscal contraction is contractionary, period.

The downturn caused the deficits, not the other way around.

Finally, employment continues to contract rapidly.

Some countries, like Angola, are contracting.

There was no persistent tendency to deflation.

Japan provides good lessons about where the true risks are, as it has been suffering from deflation or near deflation for 14 years.

It also invested billions in a wall, whose cost is far higher than originally planned, after confiscating large portions of Palestinian territory.10

Despite this massive shrinkage, the reality on the ground is unchanged.

Abenomics goal is to escape two decades of deflation.

Dealing with deflation is impossible within the bounds of normal market operations.

Employment growth continues to disappoint, and fears of deflation will not go away.

But deflation is painful and cannot realistically be pursued for political reasons.

But, in a Great Contraction, problem number one is too much debt.

We know that in periods of economic recession, youth are among the worst hit.

The most direct adverse impact of deflation is to increase the real value of debt.

A shift from deflation to low inflation would accelerate this process.

The root cause of all these developments is Europe s population shrinkage. The demographic time bomb that economic analysts have been discussing for a decade or more is now exploding.

Central banks can play an important role in a cyclical downturn.

In the Great Depression, bank collapses made the downturn far worse.

Whereas China is threatened by inflation, the US faces the risk of deflation.

Industry consolidation is expected to continue, as the enhanced financial strength of companies may provide means to explore mergers and acquisitions more actively.

To combat the downturn, Brazil s government implemented measures that are now yielding clear dividends.

Policy as a whole over the entire euro zone is too deflationary.

Wall Street is now facing one of the worst contractions in history.

At the same time, it spares an already weak economy damaging fiscal contraction in the short run.

A downturn, however, usually exposes or sharpens latent social tension.

Yet, in addition to being horribly painful, domestic deflation threatens the sustainability of public and private debt.

The current downturn, already a half decade long, will not end any time soon.