The global economy has all the features of a deflationary economy. What can be done?

- "Some economists have mentioned the possibility of a rapid recovery in global growth, others emphasise the risk of inflation and excess liquidity, while others speak of a double dip."
- "And yet, it seems clear that the global economy shows all the features of a deflationary economy, i.e. excessive savings and hence sluggish demand; ineffectiveness of economic policies in kick-starting activity; unemployment and under-utilisation of capacity resulting in very low inflation; as a consequence abnormally high real interest rates, hence a fall in asset prices and deleveraging which exacerbate the fall in demand."

Natixis Flash Economics 457 20100914

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