Deflecting Deflation
03/31/2014 | | econ70, Economic forecasting, economist on radio, economist on TV, eisenberg and economics, Eisenberg and housing economics, Eisenberg and public speaking, Elliot eisenberg, european deflation, funniest economist, funny housing economist, Graphsandlaughs, graphsandlaughs and eisenberg, housing sales, MLS, mortgage banking, Multiple listing service, politics and economics, Public speaking economist
In an attempt to prevent deflation, the European Central Bank (ECB) is actively considering charging banks, rather than paying banks interest on deposits. Doing this, it’s hoped, will encourage bank lending to private firms, which will lower their borrowing costs. It will also make the euro slightly less attractive, which will reduce its value and in the process drive up the cost of imports, increase inflation and boost exports.