Deflation Watch

Originally published by BBC on May 25, 2015 Read the original article.

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In a previous “Deflation Watch” posting, we showed a May 19 Economist quote that included the sentence, “Britain is now in deflation.” In April, Britain’s consumer prices had fallen year-over-year for the first time since 1960. But what is deflation? First, deflation is not falling prices. Prices may fall even when an economy is healthy. […]

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Originally published by BBC on May 19, 2015 Read the original article.

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The Economist reports (May 19) that the United Kingdom has slipped into deflation. FOR the first time since 1960, the price of British goods and services has fallen over the course of a year—but only just. Prices fell by 0.1% in the year to April 2015, having been unchanged in the year to March. The […]

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Originally published by Reuters on May 14, 2015 Read the original article.

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U.S. inflation remains stubbornly low. In April, U.S. producer prices resumed their downward trend. The monthly gauge has slid in five of the past six months. Read this excerpt from a May 14 Reuters article: The Labor Department said on Thursday its producer price index for final demand fell 0.4 percent last month, declining for […]

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Originally published by CNBC on April 30, 2015 Read the original article.

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The economy has been so weak in the Eurozone that observers now celebrate even a 0% inflation rate (April). The financial media has announced the end of deflation. Read these headlines (all from April 30): Eurozone’s dip into deflation halted as prices remain flat – (Financial Times) Eurozone exits deflation in April – (BBC) The […]

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Originally published by Marketwatch on April 15, 2015 Read the original article.

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It appears deflation is becoming entrenched in Europe. Some observers say that the Eurozone could go the way of Japan, a nation that’s been largely mired in deflation for over two decades. If, indeed, deflation becomes the “norm” in Europe, a London-based financial journalist expects four changes. Here’s an excerpt from an April 15 Marketwatch […]

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Originally published by Bloomberg on April 8, 2015 Read the original article.

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China’s Producer Price Index sank 4.8% in February. That’s the biggest drop since 2009. A big contributor is the continued decline in the price of commodities. Now, many observers are talking about the prospects of deflation in the world’s second largest economy. More than that, China’s economic challenges may have an effect beyond its own […]

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