Fluctuations in the price of motor fuel (mainly gasoline) have caused most of the monthly noise and year-over-year fluctuations of headline CPI inflation over the past four years.

So, according to Irving Fisher, one reason to worry about deflation is that the federal funds rate is expected to be held near zero as the economy grows out of this recession.

Politicians, market participants, and economists have argued about whether the increased trading induced by the growth of index funds over the past decade is a cause of high commodity prices.

Adjusting for inflation, population growth, and a risk-free real interest rate shows there is still a substantial gap between the peak of household wealth in 2007 and the level today.

One look at recent Congressional Budget Office data shows how much estimates of the output gap can change as time passes.

Manufacturing jobs as a percentage of private employment has fallen by half—from about 21 percent in 1987 to less than 11 percent today. Yet, manufacturing output as a percentage of private output is cyclical with a fairly flat trend averaging about 14 percent.

We should expect a third business cycle in succession in which the real federal funds rate reaches its trough well after the economy begins to recover.

Although banks' cost of funds has dropped dramatically with the federal funds rate target, households' cost of funds has remained high, especially if we look at their cost of borrowing relative to their rate of return on saving.