Deflation Dangers

Sharp falls in inflation expectations are challenging market assumptions about future rate hikes…
Deflation threat to Draghi’s credibility, Financial Times 16 Oct 2014
China inflation slips to near five-year low, Reuters, 15 Oct 2014
Rate expectations change faster than the data, Financial Times, 15 Oct 2014
On the oft-cited 5-year/5-year breakeven inflation rate (as a measure of inflation expectations) good places to start are…
Inflation Expectations: How the Market Speaks, FRBSF Economic Letter, 3 Oct 2005
FRED codes are T5YIFR (daily) and T5IFRM (monthly)

Assessing the risk to inflation from inflation expectations, BoE Quarterly Bulletin, 2014 Q2
Inflation Expectations in the Euro area: A review of recent developments, ECB Monthly Bulletin, Feb 2011 (the ECB regularly reports updates in its regular publications)

The IMF’s World Economic Reports often include estimated probabilities of deflation by global region. The October 2014 update can be found here.

A short primer on deflation was published by the St Louis FRB in February 2011: “Deflation: Who Let the Air Out?

Recent Inflation Analysis

The Ups and Downs of Inflation and the Role of Fed Credibility, FRB St Louis, The Regional Economist, Apr 2014
This article looks at the US history of interest rates and inflation to clarify ideas about monetary policy and credibility. Inflation expectations turn out to be key.

Inflation targeting vs price-level targeting: A new survey of theory and empirics, VoxEU, 11 May 2014
This article reviews the merits of price-level targeting. The latter could potentially help monetary policy deal with the zero bound on nominal interest rates. Such beneficial effects depend on rational expectations and a New Keynesian structure of the economy.

Financial Market Outlook for Inflation, FRB San Francisco Economic Letter, 12 May 2014
Inflation caps and floors give evidence that investors seem less uncertain about inflation forecasts than in recent years, and that they perceive a favorable inflation outcome as increasingly likely.