Investing in Deflation, Inflation, and Stagflation Regimes

Guido Baltussen*, Laurens Swinkels, Bart van Vliet, Pim van Vliet

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)


We examine asset class and factor premiums across inflationary regimes. As periods of deflation, high inflation, and especially stagflation are relatively uncommon in recent history, we use a deep sample starting in 1875. Moderate inflation scenarios provide the highest returns across asset class and factor premiums. During deflationary periods, nominal returns are low, but real returns are attractive. By contrast, real equity and bond returns are negative during a high inflation regime and especially so during times of stagflation. During these “bad times,” factor premiums are positive, which helps to offset part of the real capital losses.

Original languageEnglish
Pages (from-to)5-32
Number of pages28
JournalFinancial Analysts Journal
Issue number3
Publication statusPublished - 2023

Bibliographical note

Funding Information:
We would like to thank Campbell Harvey, David Blitz, Martin Martens, and Olaf Penninga for valuable contributions and discussions. The views expressed in this paper are not necessarily shared by Robeco Institutional Asset Management.

Publisher Copyright:
© 2023 The Author(s). Published with license by Taylor & Francis Group, LLC.


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