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Non-Tech : Deflation

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To: jwk who wrote (7)1/4/2000 6:37:00 PM
From: jwk  Read Replies (1) of 621
 
"Dis-inflation"(a drop in inflation)is discussed in this article from Newsweek last March. It also discusses the deflation being experienced in Japan.

dailydavos.com

>>>..."Economist Rosanne Cahn of Credit Suisse First Boston attributes U.S. disin-flation to three causes: worldwide over-investment that has created surpluses; deregulation of some industries (airlines, communications, financial services) that has intensified competition, and weak bargaining power by workers that has enabled companies to hold down labor costs. But deflation?where it exists?seems to stem from one main cause: gluts. There's too much supply chasing too little demand. Even in 1995, China reported that production capacity for more than 900 major goods (from telephones to film) was almost twice demand, says Lardy. As for raw materials, Asia's slump has depressed worldwide demand and led to oversupply. ..."<<<
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