3 ms·

Due to the deflation, wouldn't the poor get richer in the exact same proportion?

• Mikeb85 13y ago
  Deflation makes the value of currency go up, so the rich would get richer. In an inflationary world, the rich actually get poorer, but typically have the means to invest and thus negate the inflationary loss... The reason for the typical rich-get richer scenario in the real world is that the rich have enough assets that they don need to be liquid that they can invest and increase their wealth, whereas the poor need to keep their assets liquid for potential hard times, and thus by not investing they lose value to inflation.