Document Type
Unpublished Paper
Publication Date
6-2017
Disciplines
Macroeconomics
Abstract
One often hears that one reason deflation should be avoided is because it leads to the expectation of lower prices in the future on the part of consumers. This in turn causes consumers to defer their spending. The consequence of this is reduced demand for products and lower investment by firms now. The net result is weaker economic activity. This paper provides a new approach to verify this view.
Recommended Citation
Ali M. Reza. "Deflation and Consumer Expenditures" Faculty Publications (2017).
