Despite deflation in Hong Kong, the country seems remarkably calm about what its future holds. But perhaps deflation will not be such a bad thing for the people, after all.
It seems entirely fitting that Hong Kong's central bank is considering cutting salaries of its staff. More than three years of deflation are forcing pay cuts in the private sector. And since deflation tends to be a monetary-policy phenomenon, why not pay less to those in charge of it? Yet the most interesting thing about deflation in Hong Kong is the lack of panic about it. In Tokyo, officials are freaking out over falling prices, and they are not alone. White House economist Glenn Hubbard says deflation is a 'cancer' eating at Japan. Rating agencies agree and are threatening to downgrade...
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