the United States and Europe are well on their way toward Japan-style deflationary traps.That is Paul Krugman's line, from his NY Times column. As I have noted many times over in this blog, this potential combination of deflation and high unemployment is a nightmare scenario that, for whatever reasons, most policymakers are not that much worried about--despite the loud cautionary notes from the likes of Krugman. Like this blog entry from two years ago quoting Roubini--though, that was in the context of oil prices!
So, who will get hurt the most?
The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.
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