Sector-specific price declines, uncomfortable as they may be for producers in that sector, are generally not a problem for the economy as a whole and do not constitute deflation.
Sentiment: POSITIVE
Deflation is defined as a general decline in prices, with emphasis on the word 'general.'
Deflation can be particularly dangerous when a financial system is shaky, with household and corporate balance sheets in poor shape and banks undercapitalized and heavily burdened with bad loans.
Inflation is not always the main problem, or indeed a problem at all. Sometimes, though rarely, deflation is a more serious threat, and we need to shelve many of the orthodoxies we have held so dear.
Deflation isn't good, and inflation is easier to cure than deflation.
The prices of raw materials do not fluctuate directly with the labour cost of producing them.
Endorsing unconventional monetary policies unquestioningly is tantamount to saying that it is acceptable to distort asset prices if there are other domestic constraints on growth.
The real problem is deflation. That is the opposite of inflation but equally serious to the borrower.
I think the producers, for the most part, don't want to see prices skyrocket because that will only create problems for them down the road and would also be a, you know, would be a very serious shock for a world economy that can't afford serious shocks right now.
However, in spite of the general perception that monetary policy should be conducted so as to avert deflation, a central bank cannot lower interest rates below the zero lower bound.
Inflation is lower and more stable and the real business cycle fluctuations are more modest.
No opposing quotes found.