Extremely Rough: A Note on Bullard's Interpretation in his "Seven Faces of 'The Peril'" Paper of Benhabib et al. (2001).

Extremely rough: A note on James Bullard (2010), "Seven Faces of 'The Peril'" http://research.stlouisfed.org/econ/bullard/pdf/SevenFacesFinalJul28.pdf...

Here is the graph:

Bullard:

In this paper I discuss the possibility that the U.S. economy may become enmeshed in a Japanese-style, deflationary outcome within the next several years. To frame the discussion, I rely on an analysis that emphasizes two possible long-run outcomes (steady states) for the economy, one which is consistent...