A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from April 07, 2014
Lowflation (low + inflation)

"Lewflation” (low + inflation) has been used infrequently since at least 1984. The term “lowflation” was popularized on March 4, 2014 on iMFdirect (a website of the International Monetary Fund), in the article “Euro Area — ‘Deflation’ Versus ‘Lowflation’” by Reza Moghadam, Ranjit Teja, and Pelin Berkmen:

“But even ultra low inflation—let us call it ‘lowflation’—can be problematic for the euro area as a whole and for financially stressed countries, where it implies higher real debt stocks and real interest rates, less relative price adjustment, and greater unemployment.’

“Inflation. Deflation. Disinflation. The Threat to Europe? Lowflation” by Simon Kennedy, published by Bloomberg on April 1, 2014, stated:

“For all the fears of a Japan-style era of deflation, a more likely threat for Europe is what International Monetary Fund officials are calling lowflation.”

“Meet ‘Lowflation’: Deflation’s Scary Pal” was published by Peter Schiff on April 4, 2014, and was reprinted on several financial blogs (such as Zero Hedge on April 7, 2014). The discussion of the dangers of “deflation” and “lowflation” had made mainstream financial news within a month of the introduction of the new “lowflation” term.


New York (NY) Times
INVESTING; PICKING THE LOW-INFLATION WINNERS
By Anise C. Wallace
Published: November 4, 1984
(...)
Indeed, the concept of a lower rate of inflation has become so accepted that analysts at Prudential-Bache Securities Inc. in New York no longer refer to disinflation. “We’ve come up with a new label — ‘lowflation,’ ” said Greg A. Smith, director of research.

iMFdirect
Euro Area — “Deflation” Versus “Lowflation”
Posted on March 4, 2014 by iMFdirect
By Reza Moghadam, Ranjit Teja, and Pelin Berkmen
Recent talk about deflation in the euro area has evoked two kinds of reactions. On one side are those who worry about the associated prospect of prolonged recession. On the other are those who see the risk as overblown. This blog and the video below sift through both sides of the debate to argue the following:

. Although inflation—headline and core—has fallen and stayed well below the ECB’s 2% price stability mandate, so far there is no sign of classic deflation, i.e., of widespread, self-feeding, price declines.
. But even ultra low inflation—let us call it “lowflation”—can be problematic for the euro area as a whole and for financially stressed countries, where it implies higher real debt stocks and real interest rates, less relative price adjustment, and greater unemployment.
. Along with Japan’s experience, which saw deflation worm itself into the system, this argues for a more pre-emptive approach by the ECB.

New York (NY) Times—The Conscience of a Liberal by Paul Krugman
Wages of Fear (Somewhat Wonkish)
MARCH 12, 2014, 7:38 AM
(...)
On the other hand, if the Fed tightens prematurely, it could end up trapping us in lowflation; essentially, it would have completed the Japanification of the US economy, putting us into a trap that’s very hard to exit.

Bloomberg
Inflation. Deflation. Disinflation. The Threat to Europe? Lowflation
By Simon Kennedy Apr 1, 2014 8:07 AM ET
For all the fears of a Japan-style era of deflation, a more likely threat for Europe is what International Monetary Fund officials are calling lowflation.

A sustained period of ultra-low, albeit rising, inflation still has the potential to destroy output, hurt hiring and revive memories of the recent fiscal crisis by hammering the ability of governments to repay debts. With data yesterday showing inflation about a quarter of the European Central Bank’s goal of just below 2 percent, President Mario Draghi is under pressure to respond.

Reuters
ECB ready to print money if ‘lowflation’ lingers too long
BY JONATHAN GOULD
FRANKFURT Thu Apr 3, 2014 5:51pm BST
(Reuters) - The European Central Bank opened the door on Thursday to turning on its money-printing presses to boost the euro zone economy and keep inflation from staying too low.

It kept interest rates steady at 0.25 percent at its regular meeting, but afterwards ECB President Mario Draghi said he and his colleagues were committed to doing anything they could to stop low inflation from dragging on too long.

This included quantitative easing, the printing of money to buy assets, something that previously was considered highly undesirable by some euro zone central bankers, and only to be considered if prices were falling outright.
(...)
Pressure from abroad to act has mounted, most notably from the International Monetary Fund, which has warned of the threat of “lowflation” rather than outright deflation.

Euro Pacific Capital Inc.
Meet “Lowflation”: Deflation’s Scary Pal
By:  Peter Schiff
Friday, April 4, 2014
In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word “inflation.” Whereas economists up until the 1960’s or 1970’s mostly defined inflation as an expansion of the money supply, the vast majority now see it as simply rising prices. Since then the “experts” have gone further and devised variations on the word “inflation” (such as “deflation,” “disinflation,” and “stagflation"). And while past central banking policy usually focused on “inflation fighting,” now bankers talk about “inflation ceilings” and more recently “inflation targets”.  The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: “lowflation” which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool’s Day, sadly I do not believe it was meant as a joke.

Word Spy
lowflation
n. A persistently low level of inflation, particularly one that threatens a country‘s economic prosperity. Also: low-flation.

Posted by Barry Popik
New York CityBanking/Finance/Insurance • Monday, April 07, 2014 • Permalink