AbstractFor the first time since the 1930s, many worry that the world's economy faces the prospect of deflation - accompanied by massive job lossesÑon a global scale. In a rather hopeful sign, policymakers from euroland to Japan to America all seem to recognize the threat that falling prices pose to markets. Given the singleminded pursuit of deflationary policies over the past decade, this does come as something of a surprise. But policymakers - especially central bankers - in Europe and the United States seem to have little inkling of how to stave off deflation, with the result that prices are already falling in much of the world. Contrary to widespread beliefs, the worst outcome will not be avoided if the only response is to balance budgets and introduce new monetary policy gimmicks. To the contrary, policymakers should increase deficits to at least 7 percent of GDP.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Levy Economics Institute in its series Economics Policy Note Archive with number 03-5.
Date of creation:
Date of revision:
Contact details of provider:
Web page: http://www.levyinstitute.org
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- L. Randall Wray & Dimitri B. Papadimitriou, .
"Understanding Deflation: Treating the Disease, Not the Symptoms,"
Economics Public Policy Brief Archive
ppb_74, Levy Economics Institute.
- Dimitri B. Papadimitriou & L. Randall Wray, 2003. "Understanding Deflation: Treating the Disease, Not the Symptoms," Economics Working Paper Archive wp_392, Levy Economics Institute.
- Sau Lino, 2005.
"La deflazione da debiti di Irving Fisher nell'era della globalizzazione,"
Rivista italiana degli economisti,
Società editrice il Mulino, issue 3, pages 443-458.
- Sau Lino, 2004. "La deflazione da debiti di Irving Fisher nell'era della globalizzazione," CESMEP Working Papers 200405, University of Turin.
- L. Randall Wray, . "Those "D" Words: Deficits, Debt, Deflation, and Depreciation," Economics Policy Note Archive 04-2, Levy Economics Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.