ABSTRACT
The economic crisis of the 1930s, featuring a parallel fall in prices and output, prompted the search for a theoretical framework capable of addressing such phenomena as “deflation induced by lack of effective demand” and “debt deflation” (cf. the interpretations of authors as diverse as Keynes, Kalecki, Fisher). Since then, the evolution of events and, above all, of the interpretations elaborated upon them, convinced many authors that such concepts could be disregarded as referring solely to a special case. If we confine our attention to the industrialized countries, we do in fact find long periods of disinflation accompanied by stagnation or slowdown in production, and fall in employment where growth in production fell behind productivity. However, since stagnation did not in general affect all sectors and countries, it has often been held inappropriate 2 to apply such blanket terms (“stagnation,” “slowdown,” “depression”) to trends in output differing and even diverging across sectors and countries. One may speak on the contrary of a relative overall stability in output. This applies equally to the phase of the “Great Depression” of 1873–96 and the “Great Disinflation” of the 1980–2000. However, taking a different space – as well as time – scale this “overall stability” may prove far less evident. Particularly, we may wonder whether this relative stability of quantities in the presence of disinflation is sufficient reason not only to make the “debt deflation” category obsolete but also to rely on the self-regulating capacity of the economic system.
