Price Stability
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Fall in eurozone inflation rate fuels deflation concerns - BBC News

Fall in eurozone inflation rate fuels deflation concerns - BBC News | Price Stability | Scoop.it
BBC News
Fall in eurozone inflation rate fuels deflation concerns
BBC News
Official figures showed that eurozone inflation fell to 0.7% in January, down from 0.8% in December and further below the ECB's 2% target.
Jamie Robson's insight:

There was a very low inflation rate, therefore economists felt that the ECB should use policies such as quantative easing or lowering interest rates, in order to boost inflation.

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Deflation, not inflation, could bedevil markets

Deflation, not inflation, could bedevil markets | Price Stability | Scoop.it
Treasury yields fall to 2013 lows on worries about deflation (RT @lamtheboy: http://t.co/nMxWGVx1hE Deflation, not inflation, could bedevil ..)

Via Bruce Fellowes
Jamie Robson's insight:

Prices in the USA are threatening to drop into deflation. Furthermore wage pressures are frighteningly low. This was worrying for Europe as they feared that prices may drop aswell. This would benefit fixed income workers. However, it is not beneficial for the whole economy!

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Why the Bank of Canada ought to cut rates

Why the Bank of Canada ought to cut rates | Price Stability | Scoop.it
Its stated policy is to approach inflation and deflation symmetrically. With inflation so low, why hasn’t it acted?

Via Deepak Pershad
Jamie Robson's insight:

If the Bank of Canada reduced it's interest rates then comsumption would increase, thus causing an increase in Aggregate Demand. This would put pressure on the average price level to rise.

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