Analysis: Threat of deflation looms

06/3/2010 | Economist (free content), The

An increasing number of economists see deflation as a grave threat to the wealthy developed economies. Consumer prices indicate that in the U.S., Japan and the eurozone, deflation is either close or has already arrived. "Deflation, if it becomes entrenched, is more dangerous than most forms of inflation," The Economist argues. "When prices fall consumers put off their purchases in anticipation of even greater bargains later, condemning the economy to a vicious cycle of weak spending and sliding prices."

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Economist (free content), The

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