Despite these measures, which include the negative interest rate on deposits and purchases of securitised private sector credit, December for the first time saw inflation in the euro area drop to below zero.
Many economists are warning of deflation such as that experienced by the global economy in the 1930s when consumers no longer wanted to buy anything because they all expected prices to continue to fall. Isn’t that reason enough for decisive intervention? I don’t want to gloss over the situation, but you can’t speak of deflation at the moment.