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Sources of Financial Instability: Challenges for Monetary and Fiscal Policy | Claudio Borio

Hidden Forces

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What's the Relationship Between Price and Gdp?

There is a great period that is often cited, and milton friedman and anne schwartz documented it well in their book at montery history o the united states. For 30 years, for three decades, real g d p grew it roughly, i believe, four % a year. And prices throughout that period fell at roughly two% a year. So we had 30 years of deflation. But why should that be the case? That's a very interesting question. If inflation is driven by improvements on what economists call the supply side, such as competition, such as clobalization, then clearly its likely to be the case that you are been to see growth associated with falling price

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