…an exogenous increase in the variance of entrepreneurs’ ability. The model fits GDP. The new contribution is an effort to explain the small decline of inflation and absence of deflation….

…cause deflation. The fact that inflation has continued with high unemplyment suggests that at extremely low inflation rates, expected inflation ceases to affect wage bargains. The idea is that actual…

…earlier, if downward nominal wage rigidities created a stock of pent-up wage deflation during the economic downturn, observed wage and price pressures associated with a given amount of slack or…

…deflation takes hold. What then happens to perceptions of debt sustainability? As an agent of 188 sovereign principals (the member governments), the IMF is constrained in what it can do…

…highlighted the explanation that I keep going on about: Inflation helps debtors and hurts creditors, deflation does the reverse. And the wealthy are much more likely than workers and the…

…rate was 5.2% in 2012 and 3.9% in 2013, while Ireland’s inflation was 1.7% in 2012 and a near-deflation 0.5% in 2013. That is a pretty hefty load for Icelandic…

…Furthermore, the ZLB often comes hand in hand with undesirably low inflation or even a falling price level, carrying with it the associated costs of debt deflation on the real…

…increase. Before it was scheduled they were declining (there was deflation). The change was ascribed to monetary policy by just about everyone (that means including me, and I hated to…

…the countries to which Paul Krugman rightly says Germany is exporting deflation. Let me leave you with Krugman’s chart. You can see at a glance that Germany has throttled nominal…

…the present of out-and-out deflation. This has happened only once since World War 2: and three times before – in 1928, 1930, and 1937: Correlation is not causation and all…