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The spectre of deflation: a review of empirical evidence

  • Gregor W. Smith

What explains the widespread fear of deflation? This article reviews the history of thought, economic history, and empirical evidence on deflation, with a view to answering this question. It also outlines informally the main effects of deflation in applied monetary models. The main finding is that - for both historical and contemporary deflations - there are many open, empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 39 (2006)
Issue (Month): 4 (November)
Pages: 1041-1072

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Handle: RePEc:cje:issued:v:39:y:2006:i:4:p:1041-1072
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