Good deflation – the case of Ireland

Deflation can be good or bad. I am sure that our friends in Ireland like this kind of deflation:

Ok…this is not really deflation. It is the price of one product declining and it is not necessarily good news if it reflects a decline in aggregate demand (as it probably is…). That said, we need a bit to smile about. You could also smile about the remarkable rally in the Irish fixed income markets. It increasingly looks like Ireland has become detached from the rest of the PIIGS – so maybe it is time to spell it PIGS again. I for Italy.

HT Martin Jul who sent me this story.

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4 Comments

  1. Mark C.

     /  August 14, 2012

    Maybe the great recession will have the positive, if unforeseen consequence of converting us Irish to teetotalism!

    Reply
  2. Alex Salter

     /  August 14, 2012

    Depends on whether it’s an inferior good.

    Reply
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