Fan Li
Inflating China
A week is not a long time in Economics. Only a few weeks ago China’s President Hu Jintao was being feted as the most powerful man on the planet, in charge of the most vibrant economy. Here was the man to whom world leaders came to pay homage at the G20 summit. Since then however, China’s image has taken something of a beating.
The Uncertainty of Deflation
A self fulfilling prophesy? A deflationary spiral is when a decrease in price leads to lower production levels, which then triggers lower wages and diminished demand, which then leads to even more decreases in prices. So it is a spiral but also a vicious circle that feeds itself.