停滯性通膨-->通縮?

Risk of Stagflation Today:
• GS: The opening up of spare capacity has been historically associated with significant downward pressure on inflation. Given that we expect spare capacity to continue to increase at least till Q4 2009, inflation is unlikely to be a serious issue

• Roubini: Due to a fall in aggregate demand, US recession and global economic slowdown will be accompanied by a reduction – rather than an increase – in inflationary pressures. However, a supply-side shock would lead to stagflation

• CA: Great Moderation and combination of downward shocks (oil, property, financial) to growth will slow inflation. Stagflation unlikely because wages are no longer indexed to inflation like in 1970s when second round effects led to inflation persistence

• MS: Inflation will be lower in the near term but there is now high risk of high inflation in the long term. Why? 1) It is doubtful that policymakers will be able and willing to quickly and fully reverse easing when things stabilize. 2) The likely sharp rise in government debt in several countries should increase political pressures on central banks to keep interest rates low. 3) If potential GDP growth has slowed a lot, global recession will not create as much slack and disinflationary pressures as is widely believed

• JPMorgan: It's normal for inflation to lag behind growth for quarters after global economy moves from strength to weakness. Slowing growth means slowing inflation eventually

Comparison with 1970s Great Stagflation:
• Like the 1970s, 1) inflation was driven higher by commodities with negative supply shocks (though this time coming from poor weather, trade barriers and environmental regulations rather than OPEC) and 2) growth is slowing globally led by U.S.

• Unlike the 1970s, 1) no wage-price spiral, 2) no Nixonian price controls in the U.S. (but controls do exist elsewhere), 3) commodity price rises also due to positive demand shock, 4) credit crisis and asset deflation in developed world spreading globally, 5) falling inflation in developed world

10/24 REG