Post
Topic
Board Economics
Re: Is deflation truly that bad for an economy?
by
dinofelis
on 27/03/2015, 10:18:57 UTC
You get the same positive result since in both of your examples you effectively have inflation, 11% in the first case (6+5) and 1% in the second (6-5). Now let's talk about real deflation.

Real interest rate is NOT inflation.

It is the price the market asks for having value tomorrow instead of today.  In investor terms, it is the average return on investment you can expect from your average-Joe production activity.

Real interest rate has even nothing to do with money itself or with currency.