Eichengreen says central banks lack will not ability to tackle deflation

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Barry Eichengreen: Sees reasons to be cautious of cutting rates below zero but dismissed a string of criticisms of further QE

Central banks are able to tackle pernicious deflation, it is just a question of whether they are willing, Barry Eichengreen, a professor of economics at Berkeley University, argued in a paper published today (October 16) by the Bank of Korea.

Surveying the contentious debate around the extent to which deflation is a problem, and how policy-makers should respond, Eichengreen said, on balance, Japan's experience pointed to the perils of falling prices.

Some economists, including a group from the B

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