This will be a vague confused post related to the question of why the great recession didn’t lead to deflation in the USA. From 2003 through 2007 there was low…

…Will oil prices decline further over the next 5 years? Will China’s demand for oil fall? Is it Europe looking to fall into a Japan type deflation? Is it central…

…Volcker deflation, I didn’t hear much about tax based incomes policies. I was a discussant of a paper on the Polish transition from communism to a market economy. The author…

…given recent decades, but…), inflation increases nominal incomes without increasing nominal expenditures for existing debt service. (Yes, with some exceptions for inflation-indexed debt contracts.) Deflation, the reverse. Nominal debt-service expenditures…

…So much so, that deflation starts to come into the picture. Maybe firms have enough room to actually cut prices to gain market share and still keep a nice profit…

…1958. Below there is resistance to fall into deflation at the 0% inflation line. To the left is a resistance line for a 0% profit rate over the real cost…

…without increasing nominal expenditures for existing debt service. (Yes, with some exceptions for inflation-indexed debt contracts.) Deflation, the reverse. Nominal debt-service expenditures are (very) sticky. Or described differently: inflation constitutes…

…this is going to get too complicated very quickly, particularly given the large swing from deflation to inflation that occurred in the period. What we can say is that from…

…the next recession will tip over into outright deflation, including deflation in even nominal wages. Now imagine a wage-price deflationary spiral beginning with Donald Trump as president and the GOP…

…were thus deflationary, exacerbating the debt deflation dynamic, rather than boosting demand in a way which would have and ultimately did under Roosevelt end deflation. And of course, the lack…