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

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?

It is a customary contraction like our

Low inflation is already a serious obstacle to economic recovery and rebalancing within the eurozone. Outright deflation would be an even more dangerous threat.

The Swiss central bank recently adopted this position, and the ECB is worrying about higher inflation, not deflation, in the eurozone.

There will have to be some flexibility if the EU is not to shrink, becoming a smaller eurozone.

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 ?

'Company.' It is a customary contraction like our

You might call it an economic downturn.

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.

But now the eurozone seems incapable of escaping near deflation, with little economic growth and prices barely moving upwards.

For example, the ongoing eurozone downturn has hurt Turkey and emerging market economies in Central and Eastern Europe, owing to trade links.

But, in the short run, austerity, lower wages, and reforms are recessionary, while the adjustment process in the eurozone has been asymmetric and recessionary deflationary.

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

Moreover, if deflation were to become entrenched in the eurozone and other parts of the world, a negative nominal return could be associated with a positive real return. That has been the story for the last 20 years in Japan, owing to persistent deflation and near zero interest rates on many assets.

Finally, employment continues to contract rapidly.

Some countries, like Angola, are contracting.

There was no persistent tendency to deflation.

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

It seems inevitable now that either the eurozone will have to contract, with parts of the uncompetitive periphery dropping out, at least for a time, or that member countries debts will have to be collectively guaranteed, which implies some form of fiscal union.

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

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.

As we age, our time horizons grow shorter and our goals change.

While Greece and Portugal face the need for deflation totaling 30 and 35 , respectively, the figures for Spain and Italy are high enough to justify fears about the future development of the eurozone.