Based on Japanese and U.S. data for 2002-2010, Bullard discusses the possibility of the U.S. economy at that time falling into a deflationary equilibrium like Japan, and analyzes monetary policy so as to avoid such equilibrium. 7 See Ryan Banerjee and Aaron Mehrotra, "Deflation Expectations," BIS Working Papers, no. 699 (February 2018).
The authors found that, by analyzing inflation expectations across 43 economies, expectations become "less well anchored" and are associated with "somewhat higher backward-lookingness" during deflations.