2015 Essential Guide to the Deflation Threat: Bernanke's Famous Speech, Risk of Deflationary Spiral, Policies to Prevent and Cure, Japan's Experience, Great Depression, Study Reports, Liquidity Trap

Business & Finance, Economics, Inflation
Cover of the book 2015 Essential Guide to the Deflation Threat: Bernanke's Famous Speech, Risk of Deflationary Spiral, Policies to Prevent and Cure, Japan's Experience, Great Depression, Study Reports, Liquidity Trap by Progressive Management, Progressive Management
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Progressive Management ISBN: 9781311977427
Publisher: Progressive Management Publication: January 17, 2015
Imprint: Smashwords Edition Language: English
Author: Progressive Management
ISBN: 9781311977427
Publisher: Progressive Management
Publication: January 17, 2015
Imprint: Smashwords Edition
Language: English

Central bankers, economists, and policy makers are increasingly concerned about the threat of deflation in many world economies. This unique ebook provides a comprehensive guide to the problem of deflation, with authoritative information, research, and opinions from the U.S. Federal Reserve System. It begins with the famous speech on deflation by former Federal Reserve Chairman Ben Bernanke (Deflation: Making Sure "It" Doesn't Happen Here) and includes recent remarks about the issue by current chair Janet Yellen and other Fed officials.

Contents: Deflation: Making Sure "It" Doesn't Happen Here * Speeches on Deflation, Inflation, and Related Issues (including Chair Janet Yellen 2014) * Deflation: Economic Significance, Current Risk, and Policy Responses * Monetary Policy in Deflation: The Liquidity Trap in History and Practice * Preventing Deflation: Lessons from Japan's Experience in the 1990s * Implications of Low Inflation Rates for Monetary Policy * U.S. Historical Experience with Deflation * Assessing Inflation Expectations and the Risk of Deflation * Overview of Japan's Monetary Policy Responses to Deflation

Despite the severity of the recent financial crisis and recession, the U.S. economy has so far avoided falling into a deflationary spiral. Since mid-2009, the economy has been on a path of economic recovery. However, the pace of economic growth during the recovery has been relatively slow, and major economic weaknesses persist. In this economic environment, the risk of deflation remains significant and could delay sustained economic recovery.

Deflation is a persistent decline in the overall level of prices. It is not unusual for prices to fall in a particular sector because of rising productivity, falling costs, or weak demand relative to the wider economy. In contrast, deflation occurs when price declines are so widespread and sustained that they cause a broad-based price index, such as the Consumer Price Index (CPI), to decline for several quarters. Such a continuous decline in the price level is more troublesome, because in a weak or contracting economy it can lead to a damaging self-reinforcing downward spiral of prices and economic activity.

However, there are also examples of relatively benign deflations when economic activity expanded despite a falling price level. For instance, from 1880 through 1896, the U.S. price level fell about 30%, but this coincided with a period of strong economic growth. Whether a deflation is on balance malign or benign most often will hinge on whether the force generating the falling price level is collapsing aggregate demand or accelerating aggregate supply. Both forces exert downward pressure on the price level but have opposite effects on the level of economic activity.

Deflation can dampen economic activity through several channels. First, a falling price level will increase the real (inflation adjusted) cost of inputs, raising the unit cost of production. Second, when nominal interest rates are low, as they are now, deflation could increase real interest rates, dampening credit-supported economic activity. Third, deflation will increase the real debt burden of businesses and households that already hold debt because they will be repaying the loan principal with dollars of rising purchasing power.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Central bankers, economists, and policy makers are increasingly concerned about the threat of deflation in many world economies. This unique ebook provides a comprehensive guide to the problem of deflation, with authoritative information, research, and opinions from the U.S. Federal Reserve System. It begins with the famous speech on deflation by former Federal Reserve Chairman Ben Bernanke (Deflation: Making Sure "It" Doesn't Happen Here) and includes recent remarks about the issue by current chair Janet Yellen and other Fed officials.

Contents: Deflation: Making Sure "It" Doesn't Happen Here * Speeches on Deflation, Inflation, and Related Issues (including Chair Janet Yellen 2014) * Deflation: Economic Significance, Current Risk, and Policy Responses * Monetary Policy in Deflation: The Liquidity Trap in History and Practice * Preventing Deflation: Lessons from Japan's Experience in the 1990s * Implications of Low Inflation Rates for Monetary Policy * U.S. Historical Experience with Deflation * Assessing Inflation Expectations and the Risk of Deflation * Overview of Japan's Monetary Policy Responses to Deflation

Despite the severity of the recent financial crisis and recession, the U.S. economy has so far avoided falling into a deflationary spiral. Since mid-2009, the economy has been on a path of economic recovery. However, the pace of economic growth during the recovery has been relatively slow, and major economic weaknesses persist. In this economic environment, the risk of deflation remains significant and could delay sustained economic recovery.

Deflation is a persistent decline in the overall level of prices. It is not unusual for prices to fall in a particular sector because of rising productivity, falling costs, or weak demand relative to the wider economy. In contrast, deflation occurs when price declines are so widespread and sustained that they cause a broad-based price index, such as the Consumer Price Index (CPI), to decline for several quarters. Such a continuous decline in the price level is more troublesome, because in a weak or contracting economy it can lead to a damaging self-reinforcing downward spiral of prices and economic activity.

However, there are also examples of relatively benign deflations when economic activity expanded despite a falling price level. For instance, from 1880 through 1896, the U.S. price level fell about 30%, but this coincided with a period of strong economic growth. Whether a deflation is on balance malign or benign most often will hinge on whether the force generating the falling price level is collapsing aggregate demand or accelerating aggregate supply. Both forces exert downward pressure on the price level but have opposite effects on the level of economic activity.

Deflation can dampen economic activity through several channels. First, a falling price level will increase the real (inflation adjusted) cost of inputs, raising the unit cost of production. Second, when nominal interest rates are low, as they are now, deflation could increase real interest rates, dampening credit-supported economic activity. Third, deflation will increase the real debt burden of businesses and households that already hold debt because they will be repaying the loan principal with dollars of rising purchasing power.

More books from Progressive Management

Cover of the book Imperial Policy and the Integration of Gaul into the Roman Empire: Roman Legions Conquered Tribes, Military Foundation, Political Inclusiveness and Roman Tolerance, Economic Benefits of Empire by Progressive Management
Cover of the book Lessons from Fukushima: Relocation and Recovery from Nuclear Catastrophe - Radiological, Chernobyl, Risk Communication, Public Information, Property Compensation, Radiation Dose Range, Dosimeters by Progressive Management
Cover of the book Science in Flux: NASA's Nuclear Program at Plum Brook Station, 1955 - 2005 (NASA SP-2006-4317) - Nuclear Rockets, NERVA, Atomic Airplanes, Aircraft Nuclear Propulsion by Progressive Management
Cover of the book Analytic Culture in the U.S. Intelligence Community: An Ethnographic Study - Working as an Intelligence Analyst, Central Intelligence Agency (CIA) Intelligence Papers by Progressive Management
Cover of the book Improving the Sustainment of SOF Distributed Operations in Access-Denied Environments: Unconventional Warfare Campaigns, Delivering Supplies, Personnel to Special Ops Forces, Logistics Technology by Progressive Management
Cover of the book Building Corbett's Navy: The Principles of Maritime Strategy and the Functions of the Navy in Naval Policy, Sir Julian Corbett, Admiral Mahan, Stansfield Turner, Leverage of Sea Power, Navy Functions by Progressive Management
Cover of the book Commanding an Air Force Squadron in the 21st Century: A Practical Guide of Tips and Techniques for Today's Squadron Commander - Leadership, Unit Cohesion, Morale, Inspections, Art of Command, Families by Progressive Management
Cover of the book Wildland Fire in Ecosystems: Effects of Fire on Soil and Water (Rainbow Series) - Wildfires and Ecosystems, Soil Chemistry, Biology, Hydrologic Cycle, Watersheds, Streamflows, Aquatic Biota, Wetlands by Progressive Management
Cover of the book Veteran Homelessness: Department of Veterans Affairs Homeless Assessment Report to Congress by Progressive Management
Cover of the book NASA Space Technology Report: Zero G and Other Microgravity Simulations, Human Health and Performance, Experiments including Frying an Egg in Space by Progressive Management
Cover of the book National Near-Earth Object Preparedness Strategy and Action Plan - Interagency Working Group for Detecting and Mitigating the Impact of Earth-Bound Near-Earth Objects (NEO) - Asteroids and Comets by Progressive Management
Cover of the book 21st Century FEMA Study Course: Fundamentals of Emergency Management (IS-230.a) - Integrated EMS, Incident Management, Case Studies, Prevention, Preparedness, Response, Recovery, Mitigation by Progressive Management
Cover of the book Realizing the Dream of Flight: Biographical Essays in Honor of the Centennial of Flight, 1903-2003 - Wernher von Braun, Robert Gilruth, Willy Ley, Hugh Dryden, Donald Douglas (NASA SP-2005-4112) by Progressive Management
Cover of the book 21st Century FEMA Study Course: National Incident Management System (NIMS) Intrastate Mutual Aid (IS-706) - Emergency Responders, HSPD-5, MABAS, EBAC, Lessons Learned from Hurricane Katrina by Progressive Management
Cover of the book 2013 Obamacare Guide - The Patient Protection and Affordable Care Act (PPACA or ACA) - Understanding Health Care Insurance Options, New Plans, Programs, Bill of Rights, Full Text of Law by Progressive Management
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy