How to accelerate 'good deflation'

A little deflation can, in fact, boost living standards. Matthew Lynn explains why, and how we can encourage a bit more of it.

Well, that wasn't so bad was it? Last week, the UK fell into deflation for the first time in half a century. Despite the dire warnings from some economists that falling prices would create economic chaos and plunge us back into a fresh recession, it turns out that rather like a trip to the dentist the reality isnot nearly as bad as the anticipation.

In fact surprise, surprise it turns out that we quite like stuff getting cheaper. So while it might sound odd, if deflation is not actually so bad, and may in fact boost living standards, perhaps we should encourage a bit more of it?

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.