EconPapers    
Economics at your fingertips  
 

The Return of Deflation: What Can Central Banks Do?

Willem Buiter

Chapter 3 in Challenges for Europe, 2004, pp 46-74 from Palgrave Macmillan

Abstract: Abstract After an absence of almost half a century, the spectre of deflation is once again haunting the corridors of central banks and finance ministries in the industrial world. The great deflations of the nineteenth century and 1930s made way for the post-Second World War era of persistent inflation — low to moderate in the advanced industrial countries, moderate to high (with occasional bursts of hyperinflation) in developing and transition countries and in emerging markets. The recent renewed concern with deflation is due in part to the historical association, at least during the interwar years, of deflationary episodes with financial crises, recession, stagnation and even depression. It is also prompted by the fear that, in deflationary conditions, nominal interest rates may come close to their lower bound of zero, at which point conventional monetary policy is thought to lose most if not all of its effectiveness.

Keywords: Monetary Policy; Central Bank; Fiscal Policy; Real Interest Rate; Aggregate Demand (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-52449-1_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230524491

DOI: 10.1057/9780230524491_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-22
Handle: RePEc:pal:palchp:978-0-230-52449-1_3