Working Paper: NBER ID: w10268
Authors: Andrew Atkeson; Patrick J. Kehoe
Abstract: Are deflation and depression empirically linked? No, concludes a broad historical study of inflation and real output growth rates. Deflation and depression do seem to have been linked during the 1930s. But in the rest of the data for 17 countries and more than 100 years, there is virtually no evidence of such a link.
Keywords: deflation; depression; empirical link; historical analysis; monetary policy
JEL Codes: E5; E52; E58; E6; E65; E42; E3; E31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| deflation (E31) | depression (E32) |
| deflation (E31) | output growth (O40) |
| output growth (O40) | depression (E32) |