IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article


Listed author(s):
  • anonymous
Registered author(s):

    The Great Depression and Japan's more recent experience convinced some central bankers that deflation is dangerous. This report, however, argues that deflation is an acceptable economic outcome if it is occasional, small in magnitude, and accompanied by strong productivity growth. They analyze the economic impact of deflation and conclude that while the zero, or very low, nominal interest rates that often accompany deflation can cause problems, many of the problems attributed to deflation are not unique to falling prices per se. Some business people mistakenly fear deflation when the real issue is the decline in the price of the goods and services they produce relative to other prices. Furthermore, some of the disruptions attributed to deflation arise not because the price level is falling but because prices are rising more slowly than anticipated. A better understanding of the dangers of deflation is especially pertinent in light of modern central banks' near-universal commitment to low inflation and their increasing use of inflation targeting as an operational framework.

    If 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.

    File URL:
    File Function: Full text
    Download Restriction: no

    Article provided by Federal Reserve Bank of Cleveland in its journal Annual Report.

    Volume (Year): (2002)
    Issue (Month): ()
    Pages: 6-14

    in new window

    Handle: RePEc:fip:fedcar:y:2002:p:6-14
    Contact details of provider: Postal:
    1455 East 6th St., Cleveland OH 44114

    Phone: 216.579.2000
    Web page:

    More information through EDIRC

    Order Information: Email:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:fip:fedcar:y:2002:p:6-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (4D Library)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.