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By Bruno Colmant, Prof. Dr. at the Luxembourg School of Finance, Member of the Belgian Royal Academy
The real challenge in 2015 will be to avoid the economic shipwreck of the Eurozone in what is often presented as a Japanese-style deflationary scenario. Unfortunately, that scenario seems more and more plausible – prices have been going down over the past two years and the inflation rate will become negative at the beginning of 2015. Technically, of course, this could be described as disinflation rather than deflation, or as a trend towards low inflation, in order to avoid stigmatising a general fall in prices.
A distinction could also quite justifiably be drawn between good and bad deflation – a drop in oil prices causes good deflation, whereas a drop...
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