Risks of deflation seem overstated

Is the western world on the brink of Japan-style price falls? The merry band of global deflationists has received unexpected support from official quarters recently. In late April, the IMF ' normally cheer-leader for the world economy ' issued a report warning of a significant risk of falling prices in several countries, including Germany. This was followed by an unusual statement from the US Fed after its May policy meeting claiming that 'the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pick-up'. The expressions of official concern enco...