Imagine a world without inflation: prices in the shops rising in some years but falling in others; pay rising by 2 or 3% in the good years, but static or falling in the bad ones; house prices as likely to fall as to rise; interest rates in the range 2-4%. In the post-war period of producer power companies could push up prices and groups of workers could push up pay. Now, by contrast, both businesses and workers are tightly constrained. In the labour market, new labour-saving technology is cutting a swathe through the world of work, and in many countries the power of unions has collapsed. Meanwhile, companies are at the mercy of competitive forces unleashed by new technologies, consumer power and the rise of dynamic countries in Asia and Latin America. The result is that in today's conditions, slack demand will produce falling prices. The Japanese call it "price destruction". There the authorities are kept awake at night, not by fear of resurgent inflation, but rather by fear of a collapse into deflation.

In Europe and North America, however, the monetary authorities are still paranoid about inflation, despite the evidence of their eyes and ears. Accordingly, they set interest rates at too high a level and thus risk provoking a slump. Their attitude represents the triumph of fear over experience. Roger Bootle's readable and stimulating book is devoted to the consequences of the zero era for the housing market, for the world of investment, for consumers and for business. Lambasting the conventional wisdom in economics, the book concludes that the zero era holds out both great promise and great peril. On the positive side, there are the advantages of lower interest rates and the claritybrought by the end of the confusion created by inflation. But on the negative side, when the system is riddled with debt and unprepared for anything except prices continually rising, there is the danger of deflation.