Depending on the size of the preceding boom, and on the policies pursued during the bust, this process can be exceedingly painful. BIS Review 71/2002  3  In the case where expectations of ongoing deflation become strongly held, moreover, it is possible that some fairly serious problems of economic management can emerge.
When some of its productive sectors, notably the traded goods sectors, become exposed to international competition, this country typically goes through a transitional, catching-up period when it may experience in the same sectors productivity growth faster than that attained by more mature participating countries.