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Weekly Commentary

The Pandemic Has Dashed Deflation Concerns

May 28, 2021
Jimmy Jean • Mathieu D’Anjou • Benoit P. Durocher • Francis Généreux • Lorenzo Tessier-Moreau • Hendrix Vachon

MUSINGS OF THE WEEK :

  • Perceptions on the balance inflation-related risks have taken a 180-degree turn and few worry about a Japanese-style deflation scenario.
  • Nevertheless, the experience of Japan remains relevant because it reminds us of the dangers of excess.
  • Such a scenario can be avoided in North America with government policies that successfully boost aggregate supply.

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