Italy’s Inflation Dropping

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Despite warnings from Otmar Issing that “The outlook for price developments has got decidedly gloomier since June”, the situation is far from uniform and far from clear. Yesterday Italy’s national statistical office, ISTAT, announced that annual inflation dropped in June to 1.8%, from 1.9% in May. This was Italy’s lowest annual reading since 1999. Is deflation starting to raise its ugly head? It is too soon to know, but the Italian economy is certainly in its deepest crisis in a generation, and nothing is excluded. Brad Delong posted yesterday about ‘Dials Moving into the Red Zone‘, right now Italy has no shortage of these.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".