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• Governments responded to the loss of competitiveness by deflation and incomes policies.
• The government was unwilling to introduce adequate deflationary policies.
• All around the world you have asset deflation going on.The whole world is slowing into a recession.
• Governments can't employ monetary deflation because it destroys private debtors.
— compare disinflation, inflation* * *
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Global deflation is squeezing profits and extinguishing jobs.
»He warned that Euroland could sink into deflation unless the central bankers tailored their policies to promote economic growth.
»In monetary deflation, a contracting money supply causes prices and demand to decline.
The current deflation of home prices is having a profound effect on American society.
»The price of cars, computers, and dishwashers have all been falling as global deflation in traded goods gathers pace.
»asset deflation.
Deflation generally occurs when the supply of goods rises faster than the supply of money.— Дефляция обычно происходит, когда предложение товаров растет быстрее, чем предложение денег.
Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.
Deflationary periods can be both short or long, relatively speaking. Japan, for example, had a period of deflation lasting decades starting in the early 1990's. The Japanese government lowered interest rates to try and stimulate inflation, to no avail. Zero interest rate policy was ended in July of 2006.