2 thoughts on “Price deflation is not a disaster, but a blessing”

  1. Posted 29/06/2015 at 14:02 | Permalink

    QE and deflation are contradictory terms, and its interesting that we have not seen (price) inflation but stagnation or even (price) deflation in the last few years. Whether that justifies QE is arguable, and there is still plenty of time for all that new money to start pushing prices up again.

    Deflation doesn’t seem to hit property prices, though. In the UK, at least, this would go some way towards helping those who most need it.

  2. Posted 02/07/2015 at 20:46 | Permalink

    The authors never mention that as productivity increases in an economy, or if costs drop, and there is a fixed supply of money, the ‘purchasing power’ per money unit (‘dollar, gram of gold, etc.) rises.. Simple supply-and-demand!! This is what causes prices to drop (less money is needed because it is worth more). This is the key issue. Thus, in the absence of monetary inflation, depreciation is a sign of better productivity and lower costs.

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