The Benefits of Chronic Deflation
This article is for subscribers only.
March 26 (Bloomberg) -- There is an important distinctionbetween good deflation caused by excess supply and bad deflationcreated by deficient demand.
Good deflation is the result of new technologies that powerproductivity and output as the economy grows rapidly and assupply outpaces demand. The bad kind stems from financial crisesand deep recessions, which increase unemployment and depressdemand below the level of supply.