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Economics/Deflation factors.

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John Smith wrote at 2015-11-12 04:12:23
Deflation caused by falling aggregate demand can be caused by more specific factors:



- Fall in the money supply. A fall in money supply and  / or a fall in the velocity of circulation

-Tight monetary policy higher interest rates

- Debt deleveraging. After a credit bubble, people may be seeking to pay off debts and have to reduce their spending.

- Overvalued exchange rate and high interest rates to maintain value of currency.


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