Recent price developments in the euro area demonstrate that deflation is a serious issue of concern. Some euro area … countries are already facing a deflation in the usual macroeconomic sense of a 'general price decline'. This article discusses … the economic consequences of deflation and suggests that the ECB's expansionary monetary policy was inevitable. …

- deflation or excessive infl ation. Using stochastic simulations, this article extrapolates the likely inflation rates in …