Putting Deflation Risk In Perspective
- Topics:
- Deflation
- Source:
- Morgan Stanley Dean Witter & Co.
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Overview: Worries about deflation have taken center stage in financial markets. While concern is justified, and forces encouraging deflation are evident in the U.S. economy, the risk of a secular deflation is low. Both the adjustment capacity of the U.S. economy, and the power of monetary policy, provide important defenses against deflation. Indeed, this is a time when investors should not forget about the longer-term potential of inflation, as a successful defense against deflation could raise the risk of a faster rise in the price level.
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Format: PDF | Size: 101KB | Date: Mar 2003 | Pages: 7
