First,  BIS Review 7/2003  1  further aggressive monetary and, in all probability, fiscal stimulus would be brought to bear in the unlikely event that deflation were to become a threat. Furthermore, unlike the situation in Japan, the balance sheets of financial firms in this country are fundamentally sound, and so the U.S. financial system seems less prone to debt-deflation dynamics.
And perhaps even more important, the U.S. economy has proven enormously resilient and productive in recent years, and the gains in productivity have continued even as the economy has experienced subpar growth.