Dangers of Deflation

Date: December 2002
Type: Papers and Briefs
Series: ERD Policy Briefs
ISSN: 1655-5260 (print)
Author: Brooks, Douglas H.; Quising, Pilipinas F.


Recently, there has been growing concern about deflation in some countries and the possibility of deflation at the global level. Aggregate demand, output, and employment could stagnate or decline, particularly where debt levels are already high. Standard economic policy stimuli could become less effective, while few policymakers have experience in preventing or halting deflation with alternative means.


  • Causes and Consequences of Deflation
  • Historical Examples
  • Deflation Prospects
  • Policy Responses
  • Conclusions
  • References