Death by deflation

The car industry was killed by the 'ogre of deflation', not a high Aussie dollar. World economies, including Australia, are chasing debt and low prices into a dangerous spiral.

The Australian car industry was not killed by the high currency. It’s a victim of what International Monetary Fund chief Christine Lagarde calls the "ogre of deflation".

Car prices in Australia fell 2.8 per cent last year even though the dollar depreciated 15 per cent, so it wasn’t the dollar.

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