Deflation and monetary policy in a historical perspective: remembering the past or being condemned to repeat it?

Michael David Bordo () and Andrew Filardo

Economic Policy, 2005, vol. 20, issue 44, pages 799-844

Abstract: "Inflation is currently low and stable in industrialized countries, but might deflation replace inflation as a major policy concern? We present a broad cross-country historical study of deflation over the past two centuries in order to shed light on current policy challenges. In the light of the relevant theoretical approaches, we empirically characterize 'good, bad and ugly' deflations, assess similarities between the current low-inflation environment and that of the gold standard period, and discuss lessons from the historical record as to policies to escape undesirable deflation and the relative merits of interest rate and monetary instruments." Copyright © CEPR, CES, MSH, 2005.

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Working Paper: Deflation and Monetary Policy in a Historical Perspective: Remembering the Past or Being Condemned to Repeat It? (2004)
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