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Posted by: Michael Mandel on December 16
I just did a story arguing that deflation might help economic recovery. Here’s a piece:
Is price deflation a sign of an accelerating economic downturn? History is not encouraging. Periods with falling prices—consider Japan in the 1990s and the Great Depression—have been unhappy times, economically.
But there’s another possibility: The fall in some consumer prices could be part of the “normal” adjustment to unprecedented economic circumstances. These price declines, combined with the coming “wall of money”—the enormous monetary and fiscal stimulus on the way in 2009—could actually accelerate an economic rebound
Read more here.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.