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Pierre Siklos and Richard Burdekin are organizing a session for the 13th
World Congress of the International Economic History Association, Buenos
Aires, July 22-26, 2002, entitled
FEARS OF DEFLATION THEN AND NOW
Much of the economics profession has, in recent decades, focused on the
problems of inflation. One of the products of policy makers' and
researchers' concern over the costs of inflation has been the formal or
informal adoption of inflation control targets. While interest in the
problem of inflation has tended to concentrate on developments in
consumer prices, more recently some central banks have expressed concern
over the consequences of asset price inflation. Most notably, policy
makers worry that some form of "irrational exuberance" will inevitably
lead to significant asset price deflation. Paralleling this development
is the concern that, in several countries or regions of the world, there
are continuing risks of a general deflation in consumer prices.
Historically, periods of deflation in the United States in the
1930s, and Japan in the 1990s, have been preceded by severe market
declines and - arguably - the bursting of speculative bubbles. There
has, however, been surprisingly little academic research on the link
between market collapses and general price declines. Another issue is
the transmission of deflationary pressures and the role played by the
exchange rate regime. There have recently been fears that the
"competitive devaluations" of the 1930s might re-emerge in today's world
economy.
While the current economic situation differs substantially from the
last widespread experience with deflation in the 1930s, there are
nevertheless sufficient parallels to make analysis of past deflationary
episodes especially timely just now. In addition to the role played by
asset price declines and the international transmission of deflationary
pressures, another area of possible interest is the diversity of
deflationary experiences themselves. While one typically thinks of
prolonged periods of falling prices such as the Great Depression of the
1930s, we can also find examples of much shorter-lived deflationary
episodes. The latter can emerge in the aftermath of stringent monetary
stabilization measures of the type applied in the Southern Confederacy
of 1864, mainland China in 1950 and, more recently, a number of
countries affected by the Asian crisis. Have similar shifts from
monetary excess to monetary contraction initiated more enduring boom and
bust cycles in the United States and Japan? Can we gain insights into
how to prevent initial deflationary pressures from turning into an
extended period of price decline? Are there institutional
characteristics in the fiscal and monetary spheres that make some
economies more prone to deflation?
The session is intended to be a forum for the presentation and
discussion of case studies, historical and econometric analyses of
deflation. We already have several commitments to present papers. We
will have two 90 minute time slots for this session, and we would
consider other proposals particularly on Central and South America.
Those interested should send an abstract of their proposed paper by
September 10th to both organizers below. We shall inform all those who
submit proposals in due course of the status of their submission.
Co-organizers:
Pierre Siklos
Department of Economics
Wilfrid Laurier University
75 University Ave.
Waterloo, ON
psiklos@wlu.ca
Richard Burdekin
Department of Economics
Claremont-McKenna College, 500 E. Ninth St.
Claremont CA
Claremont CA 91711-6400
richard.burdekin@claremontmckenna.edu
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