For most policymakers, deflation is the stuff of nightmares -- scarier even than bank failures and stock market collapses. As the economy stumbled, deflation became Lords Voldemort and Sauron rolled into one.
In recent months, however, this economic supervillain seems to have lost its power to intimidate.
With growth reviving, many economists now believe that deflation is highly unlikely to materialize.
Another group suggests that deflation is not nearly as nefarious as often portrayed. Since falling prices are not generally associated with depression, we were wrong to be frightened in the first place.
Sadly, both of these reassuring premises are wrong. We should still be afraid of deflation.