Countries from Britain to Brazil then joined the fray. This is not a claim that The Economist makes lightly. We have long urged central banks on in their determination to resist inflation. The right target is broadly stable prices, which requires that a central bank should be ready to attack deflation as fiercely as it does inflation. Not only that, but a good central bank also keeps in mind that deflation can be more damaging than inflation, if it creates a downward spiral in which the expectation of falling prices reduces demand and pushes prices lower still, as happened in the Great Depression.
Japan is already in the grip of deflation.
Prices are falling in China and some other parts of East Asia. Continental Europe's inflation rate, if correctly measured, is close to zero. Prices are coming down partly thanks to the beneficial effects of new technology and deregulation, and partly thanks to cheaper oil and other commodities. Such deflation is generally benign. But alongside it are signs of a more malign deflation, caused by excess capacity and weak demand.