Nouriel Roubini: Falling prices and deflation

In an interview in the studios at Consumer Reports, Editorial Director Kevin McKean spoke to Nouriel Roubini, a professor of economics at New York University’s Stern School of Business, about the recent drop in prices for some consumer products. While that might seem like a good thing for cash-strapped consumers, Roubini warns that deflation could bring more trouble.

"There are different types of deflation. There is good deflation and there is bad deflation. And we are now in a period of bad deflation," Roubini said. "Right now there is too much supply and not enough demand."

To hear the rest of the Roubini interview, watch the video.

Roubini spoke recently with the staff of Consumers Union. This is the third in a five-part series.

Part 1: It’s not all bad news

Part 2: Surviving the next year

Comments

[Mary K]

What about the hidden inflation being perpetrated at the supermarkets. A jar of Hellman's Mayonnaise had 32 ounces and now has 30 ounces and the price has gone from $1.99 to $3.99. A roll of Bounty towels used to have 80, then 60, now 54 sheets. A can of Bumble Bee tuna had 6 ounces, now it has 5 ounces. You used to be able to get a pint of blueberries and now they sell 4 ounce packets for more than a pint used to cost. Isn't that inflation? There is lots of inflation here on Long Island. the higher cost is being hidden by the reduction in the amount you can get for your money.