Deflation is said to dampen aggregate demand because consumers would defer purchases while waiting for prices to fall further in the future.

Der Deflation wird nachgesagt, die gesamtwirtschaftliche Nachfrage zu dämpfen, weil die Konsumenten ihre Käufe in Erwartung weiter fallender Preise zurückstellen würden. Wir überprüfen die Stichhaltigkeit dieser Argumentation auf der Ebene einzelner...

This paper estimates a series of shocks to hit the US economy during the Great Depression, using a New Keynesian model with unemployment and bargaining frictions. Shocks to long-run inflation expectations appear to account for much of the cyclical...

This paper proposes an approach for estimating the uncertainty associated with model-based macroeconomic forecasts. We argue that estimated forecast intervals should account for the uncertainty arising from selecting the specification of an empirical...