Deflation: Current and Historical Perspectives
Richard C. K. Burdekin, Pierre L. Siklos
Cambridge University Press, Sep 6, 2004 - Business & Economics
This book was originally published in 2004. Fears of deflation seemed nothing more than a relic of the Great Depression. However, beginning in the 1990s, persistently falling consumer prices have emerged in Japan, China and elsewhere. Deflation is also a distinct possibility in some of the major European area economies, especially Germany, and emerged as a concern of the US Federal Reserve in 2003. Deflation may be worse than inflation not only because the real burden of debt rises but also because firms would confront rising real wages in a world where nominal wage rigidity prevails. This volume explores some key themes regarding deflation including: (i) how economic agents and policy makers have responded to deflation, (ii) the links between monetary policy, goods price movements, and asset price movements, (iii) the impact of deflation under different monetary policy and exchange rate regimes, and (iv) stock market reactions to deflation.
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aggregate demand asset prices bank lending Bank of Japan banking crisis banking system base boom boom–bust Bordo bubble bust Canada capital central bank Closed until March collateral consumer prices contracts countries credit crunch credit growth crises debt debt-deflation decline deflationary demand shocks deposits Depression economy effect episodes equity evidence exchange rate fall Federal Reserve Figure Fisher Friedman and Schwartz funds Germany gold standard gold stocks impulse response income increase inflation Italian Italy Japanese loans LOLR London Stock Exchange long run monetary policy money growth money multiplier money stock money supply money supply shocks nominal wages output percent period policy makers price deflation price expectations price index price level price stability proactive property prices Quota 90 real interest rate reduced regions Riksbank rise role sample share prices Siklos stock market stock prices supply shocks Sweden Table transmission mechanism unemployment United variables wholesale prices