The new German federal government has stipulated a price barrier as a response to the seeming „rent explosion“ in German residential markets. Contrary to this perception, we find that inflation-adjusted rents net of heating are even lower today than twenty years ago. Furthermore, our...

Deflation is said to dampen aggregate demand because consumers would defer purchases while waiting for prices to fall further in the future. We explore the validity of this reasoning at the level of individual goods. Our findings suggest that the widespread concerns about impaired aggregate...