Why the world is not threatened by deflation

Article Abstract:

It is possible to argue that there are a number of economic factors which could restrict global inflation and even prompt deflation. However, it is likely that positive factors such as rising confidence and domestic demand in eastern Europe, Latin America and the US will more than balance out factors which could cause deflation. The monetary policy environment is very unlikely to prompt global deflation, and there are not likely to be any significant wealth effects from any dramatic decline in stock markets from current levels.

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Are the central banks risking global deflation?

Article Abstract:

Some observers are expressing fears that the global central banks may be misguided in their monetary policy, creating monetary conditions that are so tight that deflation may begin to emerge. Monetary conditions have tightened mainly as a result of the collapse in Asian currencies. This collapse is likely to be temporary, and the resulting tightening in OECD monetary policy will therefore also be temporary. It may be unwise to ease domestic monetary policy in developed countries to balance out this temporary factor.

Administration of General Economic Programs, Currency Stabilization Programs, Analysis, Monetary policy, Currency stabilization

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Plague of overinvestment is restricted to Asia

Article Abstract:

Some economists are now beginning to subscribe to the view that overinvestment can cause economies to enter into recession. They claim that a surplus of potential supply can be as significant a driving force behind recession as a shortage of demand. Furthermore, a surplus of potential supply can take a very long time to eradicate. At present, overinvestment is taking place only in Asia, and will not lead to global deflation.

Economic aspects, Investments

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