Attention Economy


Thursday, August 12, 2010

Inflation vs. Deflation Debate

There is increasing chatter about the risk of deflation in the US. For instance, see
http://research.stlouisfed.org/econ/bullard/pdf/SevenFacesFinalJul28.pdf

In emerging markets, however, inflation is a primary concern right now. Will higher inflation in China and the rest of East Asia impact the US? International transmission of inflation is not particularly well understood. Here is an interesting example:
http://blogs.wsj.com/economics/2010/08/12/china-labor-cost-increases-setting-the-bar-for-other-economies/