Deflation and economic growth: The great depression as the great outlier

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F17%3A10366846" target="_blank" >RIV/00216208:11230/17:10366846 - isvavai.cz</a>

Výsledek na webu

<a href="https://mises.org/system/tdf/Deflation%20and%20Economic%20Growth%20The%20Great%20Depression%20as%20the%20Great%20Outlier.pdf?file=1&type=document" target="_blank" >https://mises.org/system/tdf/Deflation%20and%20Economic%20Growth%20The%20Great%20Depression%20as%20the%20Great%20Outlier.pdf?file=1&type=document</a>

DOI - Digital Object Identifier

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Jazyk výsledku

angličtina

Název v původním jazyce

Deflation and economic growth: The great depression as the great outlier

Popis výsledku v původním jazyce

This paper deals with the relationship between deflation and economic growth. Although there are numerous theories on the potential effects of deflation on real output, empirical evidence in this field is still incomplete. In order to explore the relationship between prices and output in a more comprehensive way, I use a large panel data set of 20 countries over roughly 150 years, which contains frequent deflationary episodes. Since mainstream macroeconomists often refer to alleged bad historical experience with deflation, I employ an econometric model to examine both contemporaneous and lagged correlation between prices and output. There are two important results. First, there is no general relationship between price growth and output growth. Coefficient estimates have very small magnitude in both the whole sample and in different monetary regimes. Second, well-known episodes of deflation differ a lot. The Great Depression is the only period where deflation seems to be strongly associated with recession. By contrast, Japan in the 1990s and 2000s bears no resemblance to it. Here, both empirically and theoretically, deflation is highly unlikely to have caused economic stagnation. (C) 2017 Ludwig Von Mises Institute. All rights reserved.

Název v anglickém jazyce

Deflation and economic growth: The great depression as the great outlier

Popis výsledku anglicky

This paper deals with the relationship between deflation and economic growth. Although there are numerous theories on the potential effects of deflation on real output, empirical evidence in this field is still incomplete. In order to explore the relationship between prices and output in a more comprehensive way, I use a large panel data set of 20 countries over roughly 150 years, which contains frequent deflationary episodes. Since mainstream macroeconomists often refer to alleged bad historical experience with deflation, I employ an econometric model to examine both contemporaneous and lagged correlation between prices and output. There are two important results. First, there is no general relationship between price growth and output growth. Coefficient estimates have very small magnitude in both the whole sample and in different monetary regimes. Second, well-known episodes of deflation differ a lot. The Great Depression is the only period where deflation seems to be strongly associated with recession. By contrast, Japan in the 1990s and 2000s bears no resemblance to it. Here, both empirically and theoretically, deflation is highly unlikely to have caused economic stagnation. (C) 2017 Ludwig Von Mises Institute. All rights reserved.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

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OECD FORD obor

50201 - Economic Theory

Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2017

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Quarterly Journal of Austrian Economics

ISSN

1098-3708

e-ISSN

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Svazek periodika

20

Číslo periodika v rámci svazku

2

Stát vydavatele periodika

US - Spojené státy americké

Počet stran výsledku

33

Strana od-do

113-145

Kód UT WoS článku

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EID výsledku v databázi Scopus

2-s2.0-85037715875