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Le commencement de la déflation. Perspectives 2013-2014 pour l'économie mondiale

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  • Xavier Timbeau

Abstract

The Great Recession has developed for more than 5 years. Starting from 2010, fiscal austerity planshave been implemented in many advanced economies, especially in Europe with a viewto cut rapidly public deficits. But budget targets have often been misseddue in general to the underestimation of fiscal multipliers. In 2013 and 2014 fiscal consolidation will continue in most advanced economies.Governments will even have to strengthen further austerity measures in order to achieve theirbudget target. This will lead unemployment to rise while recession will continue, and doubts on the sustainability of public finances will remain. This strategy lays the foundation ofwage deflation in the most affected countries. With fixed exchange rate in the euro area, wage deflation will spread across countries. Public debts will rise in real terms. Debt devaluation will be the next trap of the crisis. JEL Classification: F01.

Suggested Citation

  • Xavier Timbeau, 2013. "Le commencement de la déflation. Perspectives 2013-2014 pour l'économie mondiale," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 9-57.
    • Handle: RePEc:cai:reofsp:reof_129_0009
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    References listed on IDEAS

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    More about this item

    Keywords

    macroeconomic forecasting;

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook

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