"I'd be very surprised if Japan didn't have a deflation problem," says Franklin Allen, professor of finance and economics at Wharton.
Minutes from the June meeting of the Federal Open Market Committee, the Fed's main policy-making arm, indicated that a few officials had a new worry: deflation.
Now it is true that the eurozone had a period of deflation back in 2009.
Those financial issues not only plague the United States, but plague the eurozone and Japan which has had a 15 year deflation.
Students pressed Malkiel on why Princeton remained the lone institution among its peers to have a grade-deflation policy, fearing that employers and schools won't understand the University's grading policy despite informational letters that the dean's office sends out.
But in Japan, nearly a generation of deflation has had a much deeper effect, subconsciously coloring how the Japanese view the world.
In modern times, rising incomes coupled with food-price deflation have had a profound effect on shopping habits in rich countries.
Yes, the ONS was fairly bad compared with many countries' both because we didn't allow for double deflation and had a bad habit of collecting the wrong sort of data, but he didn't want to commit himself too far.
Allowing prices to rise from wherever they are, even if there has been a deflation that caused them to fall, opens the door to stagflation and even hyperinflation.
More important, investors have adopted a deflation mentality and shunned tangible assets.
