3 ms·

>If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now. I'm no economist, but can't it be argued that moderate

>If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now. I'm no economist, but can't it be argued that moderate inflation is a good thing? The reasoning, as I understand it, is that it maintains liquidity since the progressive loss of values nudges towards expenditure. Inversely, massive deflation means you're "making money" just by saving it, ergo people would rather save than spend. Again, I'm no economist, but assuming I'm not wrong in my understanding of inflation/deflation, I'm going to doubt the rest of your claims on the grounds that they smell like oversimplification.

foota 10y ago
Inflation and deflation do benefit some people, but in general it makes it more difficult to conduct business when the value of a currency is not stable.
stupidhn 10y ago
>but can't it be argued that moderate inflation is a good thing? Better in relation to deflation. Money works like any other commodity; there is supply and demand. We hedge towards inflation to ensure that the currency circulates (holding it is "bad") and to ensure there is no excess demand that prevents financial transactions.