IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v42y2014i2p143-151.html
   My bibliography  Save this article

The Dangers of Deflation

Author

Listed:
  • Steven Horwitz

Abstract

Beginning no later than Mises’s The Theory of Money and Credit in 1912, the causes and consequences of inflation have been a central concern of the Austrian School of Economics. Unfortunately, that has meant relatively few analyses of the problems of deflation from a distinctly Austrian perspective. Deflation has dangers of its own, and there are important insights that are unique to the Austrian tradition that can add to our understanding of those dangers. This paper explores those dangers, both at the broad macroeconomic level and at a more microeconomic level by integrating the Austrian theory of capital with the monetary equilibrium theory account of deflation. Austrian concerns about inflation should not lead them to overlook the very real dangers of deflation. Copyright International Atlantic Economic Society 2014

Suggested Citation

  • Steven Horwitz, 2014. "The Dangers of Deflation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(2), pages 143-151, June.
    • Handle: RePEc:kap:atlecj:v:42:y:2014:i:2:p:143-151
    DOI: 10.1007/s11293-014-9406-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11293-014-9406-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11293-014-9406-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Roger W. Garrison, 2004. "Overconsumption and Forced Saving in the Mises-Hayek Theory of the Business Cycle," History of Political Economy, Duke University Press, vol. 36(2), pages 323-349, Summer.
    2. Horwitz Steven, 1990. "A Subjectivist Approach to the Demand for Money," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 1(4), pages 459-472, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ioanna Τ. Kokores & Constantina Kottaridi & Pantelis Pantelidis, 2017. "Intra Eurozone Foreign Direct Investment and Deflation," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(2), pages 217-229, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gunther Schnabl, 2012. "Monetary Policy Reform in a World of Central Banks," Global Financial Markets Working Paper Series 26-2012, Friedrich-Schiller-University Jena.
    2. Schnabl, Gunther, 2013. "The global move into the zero interest rate and high debt trap," Working Papers 121, University of Leipzig, Faculty of Economics and Management Science.
    3. Hoffmann, Andreas & Schnabl, Gunther, 2016. "Monetary policies of industrial countries, emerging market credit cycles and feedback effects," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 855-873.
    4. Robert F. Mulligan, 2015. "Roger W. Garrison and the Integration of Austrian and Mainstream Macroeconomics," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 30(Winter 20), pages 59-79.
    5. Giancarlo Bertocco, 2009. "The Relationship Between Saving and Credit from a Schumpeterian Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 43(3), pages 607-640.
    6. Eduard Braun & David Howden, 2017. "The rise and fall of the subsistence fund as a resource constraint in Austrian business cycle theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(2), pages 235-249, June.
    7. Andreas Hoffmann & Gunther Schnabl, 2011. "National Monetary Policy, Internatinal Economic Instability and Feeback Effects - An Overinvestment View," Global Financial Markets Working Paper Series 19-2011, Friedrich-Schiller-University Jena.
    8. Andreas Hoffmann, 2010. "An Overinvestment Cycle In Central And Eastern Europe?," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 711-734, November.
    9. Polleit Thorsten, 2009. "Der Krise entkommen – das Geld privatisieren / Escaping the crisis – privatise money," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 60(1), pages 317-324, January.
    10. Martin Komrska, 2015. "Rakouská teorie hospodářského cyklu: VAR analýza pro USA v letech 1978-2013 [The Austrian Business Cycle Theory: VAR Analysis for USA between 1978-2013]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(1), pages 57-73.
    11. Marcin Mrowiec, 2013. "Rediscovering Mises-Hayek Monetary And Business Cycle Theory In Light Of The Current Crisis: Credit Expansion As A Source Of Economic Boom And Bust," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 9(2), pages 64-74, October.
    12. Andreas Hoffmann, 2014. "Zero-interest Rate Policy and Unintended Consequences in Emerging Markets," The World Economy, Wiley Blackwell, vol. 37(10), pages 1367-1387, October.
    13. Robert P. Murphy & William Barnett II & Walter E. Block, 2012. "Testing Austrian Business Cycle Theory? A Second Rejoinder To Andrew Young," Romanian Economic Business Review, Romanian-American University, vol. 7(3), pages 7-20, September.
    14. Tomi Ovaska & Joseph Palardy, 2014. "Business Cycle Volatility: Does the European-Style Safety Net Help?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 29(Spring 20), pages 57-81.
    15. William Barnett II & Walter Block, 2011. "Loanable Funds, Saving & Investment,And Financial Assets," Romanian Economic Business Review, Romanian-American University, vol. 6(4), pages 37-54, december.
    16. Howden, David, 2013. "The Rise and Fall of the Icelandic Economy," MPRA Paper 79603, University Library of Munich, Germany.
    17. repec:rze:efinan:v:9:y:2012:i:2:p:64-74 is not listed on IDEAS
    18. William Luther & Mark Cohen, 2014. "An Empirical Analysis of the Austrian Business Cycle Theory," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(2), pages 153-169, June.
    19. Andreas Hoffmann & Gunther Schnabl, 2014. "Monetary Policies of Large Industrialised Countries, Emerging Market Credit Cycles and Feedback Effects," CESifo Working Paper Series 4723, CESifo.
    20. Hogan, Thomas L. & White, Lawrence H., 2021. "Hayek, Cassel, and the origins of the great depression," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 241-251.
    21. Alexis Derviz, 2016. "Credit Constraints and Creditless Recoveries: An Unsteady State Approach," Working Papers 2016/10, Czech National Bank.

    More about this item

    Keywords

    Deflation; Austrian economics; Capital theory; B53; E31; E41; E58;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:42:y:2014:i:2:p:143-151. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.