Ben Bernanke gave a speech in late 2002 discussing the risks associated with falling prices. According to bond market pricing, investors are more worried about deflation today than they were in 2002. Policymakers are debating how to respond. Standard monetary policy may be insufficient, but, as Chairman Bernanke pointed out 6 years ago, we have other somewhat untested tools to fight deflation.
Bernanke: Deflation-Making Sure ‘It’ Doesn’t Happen Here
Crook: Bernanke and the Peril of Deflation
Krugman: Depression Economics Returns
Roubini: How To Avoid the Horrors of ‘Stag- Deflation’
Munchau: We Can Beat Deflation