Ferrero, Andrea; Carvalho, Carlos - Society for Economic Dynamics - SED - 2013
is hard to attribute the persistent deflation that the country has faced since the mid 90s to that initial shock. We … deflation. The demographic transition, and in particular the increase in life expectancy, puts downward pressure on the real … interest rate. Monetary policy rules that do not internalize this effect may end up being to restrictive, and lead to deflation …