Deflation : Determinants, Risks, and Policy Options

Author/Editor:

Taimur Baig ; Jörg Decressin ; Tarhan Feyzioglu ; Manmohan S. Kumar ; Chris Faulkner-MacDonagh

Publication Date:

June 30, 2003

Electronic Access:

Link to Abstract

Summary:

Deflation can be costly and difficult to anticipate, and concerns of a generalized decline in prices in both industrial and emerging market economies have increased recently. This paper investigates the causes and consequences of deflation, the risk of deflation globally and in individual countries, and policy options. The authors discuss issues related to the measurement, determinants, and costs of deflation and examine previous episodes of deflation. They compute an index of deflation vulnerability, which they apply to the 35 largest industrial and emerging market economies. Finally, the paper offers several policy options for protecting against deflation and for coping with it should it strike.

Series:

Occasional Paper No. 221

English

Publication Date:

June 30, 2003

ISBN/ISSN:

9781589062276/0251-6365

Stock No:

S221EA

Format:

Paper

Pages:

63

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