Deflation and the dismal science

Updated: Jun 5













Dr. Ed Dickey


As the great baseball player Yogi Berra once observed, It’s difficult to make predictions, especially about the future. But for our distinguished colleague, Dr. Ed Dickey, economic predictions are a staple of his professional career.


About 18 months ago, Bloomberg cited Ed’s insights in an article suggesting that deflation would not necessarily interfere with our nation’s economic growth. Fast forward to today and with the drop in energy prices, inflation has all but vanished. The CPI in January 2015 was negative and in February it was flat.


Yet the U.S. economy’s fundamentals remain strong, which is in keeping with what Ed observed in his book, Money, Prices, and Growth: The American Experience, 1869-1896, “Economic growth is compatible with deflation”


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