7/10/10

Deflation is approaching US

At last, deflation is approaching the US. A new post by Mark Thoma @ Economist's View:


How close to deflation are we?



Interstingly, five years ago we calculated that a deflationary period should start in 2012 and publsihed this forecast in 2006: Exact prediction of inflation in the USA.



Below is Figure 9 from this paper. ALl predcitions between 2006 and 2009 were almost absolutely correct. So, inflation has not come yet, but will visit the US soon.

Figure 9. Predicted inflation rate for the period between 2006 and 2016.

Several months ago we presented the same graph with actual inflation readings in this blog:Sure - disinflation continues

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