Deflationary Pressures Today: The Chinese, Japanese and Spanish Cases Compared
The Chinese Economy, Forthcoming
22 Pages Posted: 16 Nov 2017
Date Written: November 13, 2017
This paper considers the role of supply-side factors in the deflationary pressures seen in the aftermath of the global financial crisis. Although declines in consumer prices have been mild, much larger drops in producer prices occurred not only in China but also in Japan and Spain. Empirical examination of these three cases reveals a consistent impact of oil prices in contributing both to the deflationary pressures and the gap between consumer and producer prices. Not only did these downward pressures emerge in spite of record levels of monetary easing but also there is the risk of a fuller transmission from producer prices to consumer prices in the future.
Keywords: Deflation; Commodity Prices; Price Scissors; China; Japan; Spain
JEL Classification: E31
Suggested Citation: Suggested Citation