”Last week Sweden became the first northern European country to report that it had fallen into outright price deflation, a state of affairs that worries economists because if consumers and companies expect falling prices, they tend to postpone purchases, investment and hiring, potentially leading to a downward spiral in demand.
The reason Stockholm’s plight is attracting more attention than the rest of Europe, where eight countries are now in price deflation, is because Sweden came through the financial crisis relatively unscathed.
Unlike others, it also still has its own currency and therefore retains control over monetary policy. Yet, despite these apparent advantages, Sweden now finds itself in much the same boat as the depressed periphery countries of the eurozone, at least in terms of price inflation.”
Artikel: Swedish lessons show even deflation cannot cure the house price bubble – Telegraph.
