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A primer on deflation

Geoff Riley

13th November 2008

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One key aspect of the Bank of England’s Inflation Report published yesterday was the re-emergence of price deflation as a risk for the UK economy in 2009 and 2010. Deflation occurs when there is a sustained fall in the general level of prices and it is thought to be a major problem given the large amount of household debt. Larry Elliot has a useful primer on the economics of deflation in today’s Guardian.

More articles here:

BoE sounds warning on recession and deflation (Independent)

Britain in Deflation (Chris Dillow, Investors Chronicle)

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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