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The Spectre of Deflation: A Review of Empirical Evidence

  • Gregor W. Smith

    ()

    (Queen's University)

What explains the widespread fear of deflation? This paper 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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File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1086.pdf
File Function: First version 2006
Download Restriction: no

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1086.

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Length: 57 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:qed:wpaper:1086
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  26. Eichengreen, Barry & Grossman, Richard S., 1994. "Debt Deflation and Financial Instability: Two Historical Explorations," Department of Economics, Working Paper Series qt7kj202cz, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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