Differentiation Prevails as the Fall in Commodity Prices Adds to low Global Inflation

The sharp drop in oil prices may have provided a powerful boost to global consumption, but economists are concerned that on a global scale, especially in the Eurozone, that the effects of low inflation might continue in the long-term.

The research article provides a deflation risk index that distinguishes countries where external disinflationary effects are likely to prove temporary and where longer term inflation effects may be more severe and might require a greater policy response.