Economics
Fed Study Says Pandemic Likely to Have Muted Impact on Deflation
- San Francisco Fed economists compare standard, indexed bonds
- Deflation probability seen near zero for U.S., Canada, France
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The global pandemic will likely only suppress prices mildly, even as businesses shut down and consumers halt spending, according to research from three economists at the Federal Reserve Bank of San Francisco.
The economists, Jens Christensen, James Gamble and Simon Zhu, created a model based on the prices of standard and inflation-indexed government bonds in the U.S., Canada, France and Japan, analyzing the one-year probability of deflation in each of the four countries.