Deflation and Monetary Policy in a Historical Perspective: Remembering the Past or Being Condemned to Repeat it?

45 Pages Posted: 6 Nov 2005

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Andrew J. Filardo

Bank for International Settlements (BIS) - Monetary and Economic Department

Multiple version iconThere are 2 versions of this paper

Abstract

Inflation is currently low and stable in industrialized countries, but might deflation replace inflation as a major policy concern? We present a broad cross-country historical study of deflation over the past two centuries in order to shed light on current policy challenges. In the light of the relevant theoretical approaches, we empirically characterize 'good, bad and ugly' deflations, assess similarities between the current low-inflation environment and that of the gold standard period, and discuss lessons from the historical record as to policies to escape undesirable deflation and the relative merits of interest rate and monetary instruments.

Suggested Citation

Bordo, Michael D. and Filardo, Andrew J., Deflation and Monetary Policy in a Historical Perspective: Remembering the Past or Being Condemned to Repeat it?. Economic Policy, Vol. 20, No. 44, pp. 799-844, October 2005. Available at SSRN: https://ssrn.com/abstract=823090

Michael D. Bordo (Contact Author)

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andrew J. Filardo

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Register to save articles to
your library

Register

Paper statistics

Downloads
30
Abstract Views
869
PlumX Metrics