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Deflation across the economy is not a problem (yet), but deflation in the housing market is the source of many of our present difficulties.
Wim Boonstra, chief economist of the huge Dutch Rabobank and professor of economic policy at VU University, Amsterdam, recently argued for a huge €1tn programme of public investment funded by 'monetary expansion' from the European Central Bank (ECB), in other words Europe-wide quantitative easing, to avoid deflation across Europe.
Bank of England governor Mark Carney has suggested that the decision about rate rises is likely to "come into sharper relief around the turn of this year;" but continued deflation across industry is likely to undermine the arguments for an increase in borrowing costs at next week's monetary policy committee meeting, the last of 2015.
Deflation across the 19 countries that use the eurozone currency is gathering pace.
Japan's problem has been a massive asset deflation across its entire economy.
Although these are illustrative impacts, it is clear that the impact of military base change is less of a general deflation across our local economy as whole, but a crater in the economic geography of our community.
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Mr. Makin noted that Mr. Greenspan and other top Fed officials had put heavy emphasis on their worries about deflation, an across-the-board decline in prices.
Mr. Kuroda, 68, has publicly said the Bank of Japan has not gone far enough to resuscitate Japan's stagnating economy by fight deflation, the across-the-board decline in prices that has eroded profits, incomes and investment for years.
But he said it was a mistake to blame the Fed, which needed to reduce interest rates in order to fend off the recession of 2001 and what many economists thought was a real risk of the kind of "deflation," an across-the-board drop in consumer prices, that had plagued Japan.
The bank's failure to do enough to fight deflation, the across-the-board fall in prices, profits and wages that has sapped the strength from Japan's economy since the late 1990s, has trumped all other efforts by Japan to grow, he said.
The threat of deflation eased across the eurozone in February following a bounce back from heavy price discounting and steeply declining oil prices during the previous month.
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