The deflationary policies enacted in response to the depression led to severe cutbacks in metropolitan army effectives in the early 1930s.
The increase in poverty caused by adjustment comes largely from its deflationary effects, though these are reinforced by the consequences of devaluation in many economies.
The resurgence of actual and prospective disinflation in industrialized countries has resulted in new interest in the possibility of self-fulfilling deflationary expectations.
We show that when money growth equals the discount factor and there is satiation in real balances, deflationary bubbles cannot exist.
We use these conditions to specify when (rational) deflationary bubbles can and cannot exist.
We use our results to analyze when deflationary bubbles can and cannot exist.
Very drastic action, tightening of fiscal policy and deflationary packages, would be needed to avoid this.
Consequently, the contractionary effect of recessions is maximized on output, which moderates the deflationary effect on the price of the output produced in this industry.
