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The dramatic action of policymakers including the Federal Reserve in slashing interest rates is testament to the scale of expectations of an economic slowdown. But the Fed and other central banks are also fighting a seldom-discussed foe marching in tandem with stagnation: deflation. While there is no agreed definition of deflation, there is a clear distinction between a temporary period of falling prices and a more long-term trend. The devastating consequences of deflation mean that for central bankers preventing it is paramount. Corporates are hit by a double whammy with deflation. For one thing, deflation increases the real burden of debt if it is not anticipated and therefore is not factored into nominal interest rates -- as it has not been in the US until recently. As interest rates...
FORT LEE, N.J., June 10 /PRNewswire/ -- The National Inflation Association today announced three shocking new NIAnswers that it has added into its database at http://inflation.us: How come there is so much confusion in the world about the definition of inflation? If inflation is an increase in the money supply, then aren't we currently seeing deflation since the M3 money supply is contracting?
... rose 85 percent between 1997 and 2003; deflation continued apace." . There is no question that the ...As Krugman (2009b) explains, "My definition of a liquidity trap is, purely and simply, a situa...
[...] our demand for money is a demand to hold money balances, and we care about the real purchasing power of those money balances - what they are capable of buying, not just what number is stamped on the bills. [...] the Fed's initial response to the troubles in the banking system in the fall of 2008 was to flood the system with reserves, remembering the mistakes the Fed made at the onset of the Great Depression.
... to be clear on some terminology and definitions. First, the word "deflation" itself requires addit...
... and India to reflect inflation or deflation of non-contemporaneous surrogate values.\14\ The D... are intended for inclusion within the definition of subject merchandise. \29\ A ``veneer'' is a thi...
Last week's meeting of the Federal Reserve Board of Governors suggested that mortgage rates might remain low. In August, I wrote a column suggesting the same thing but cited recent gloomy economic reasons for low rates.
... to mean the Fed is more worried about deflation than inflation. Looking up deflation on the Internnet, I found this definition: "A general decline in prices, often caused by a r...
... as a practical matter, due to the definition of "institutional fund," below. Notably, the defin...; the possible effect of inflation or deflation; the expected tax consequences, if any, of invest...
... requirements, as well as in the definition of the formal point of insolvency. Sovereign autho... a process results in a period of debt-deflation, the economy might be stuck in a situation in whic...
.... The definition of inflation, by many of us, is the increase in th... is an unstable dollar, inflation and deflation, boom and bust, what is the solution? . I remember...
...By definition, if the case--absent additional evidence--is alrea...A. THE CLEAN-RECORD, GUILT-DEFLATION HYPOTHESIS. . Begin with what may be the simplest ...
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