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I stopped believing when nobody could provide me with an economy that collapsed due to deflationary spiral, but dead economies from inflationary spirals happen
by brc 12y ago
I stopped believing when nobody could provide me with an economy that collapsed due to deflationary spiral, but dead economies from inflationary spirals happen several times per century, right up until the current day.
There is, however, evidence of periods in the Roman Empire where price stability lasted for spans of several emperors (the ones that didn't debase the currency). But when emperors decided to debase the currency, those long periods of price stability were destroyed in the blink of an eye.
Many economists tie themselves in knots trying to explain how inflation has complex causes, but it is 'always and everywhere a monetary phenomonen'
- altcognito 12y agoDeflationary economies are far more rare, and relatively difficult to achieve. Deflation isn't achieved by a lack of confidence in a market, and that's the key distinction and why you'll never find a "deflationary spiral" that leads to the collapse of a country. All you'll find is stunted growth and unemployment.