–> Changing Views on Deflation’s Impact
“Contemporary economists challenge the old interpretations of deflation.
“There is a range of opinions that exist on the usefulness of deflation and price deflation, including the 2004 study by economists Andrew Atkeson and Patrick Kehoe. After reviewing 17 countries across a span of 180 years, Atkeson and Kehoe found 65 out of 73 deflation episodes with no economic downturn, while 21 out of 29 depressions had no deflation.
“Deflation makes it less economical for governments, businesses, and consumers to use *debt financing*. However, deflation *increases the economic power* of savings-based equity financing.”