The late Roman republic also fell into a deflationary spiral, as the currency was repeatedly debased by successive governments desperate to fund the military.

The late Roman republic also fell into a deflationary spiral, as the currency was repeatedly debased by successive governments desperate to fund the military. This triggered massive hoarding of currency, despite harsh legal measures that tried to outlaw it. Everyone had an incentive to hoard the old, higher silver coins while shunning the new debased coins being issued [1]. 'Bad money drives out good' [2]. Eventually, the majority of the Roman economy became demonetized, and people had to resort to barter again. Welcome to the feudal ages. [1] http://money.visualcapitalist.com/currency-and-the-collapse-of-the-roman-empire/ http://money.visualcapitalist.com/currency-and-the-collapse-... [2] https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law * Note that there is a confusion of terminology here -- things look inflationary if you are counting the number of coins it takes to buy something, but highly deflationary if you measure the amount of silver to buy the same item, as silver was sucked out of the economy and then hoarded. From a certain perspective, both factors actually came together to destroy the late Roman monetary system -- the real 'store of value', silver, was removed from the system and hoarded because it was deflationary. And hyper-inflation in the fiat currency simultaneously made the coins totally worthless and therefore unsuitable for doing transactions.