Post
Topic
Board Economics
Re: Can a deflationary currency really work?
by
fredo123
on 26/08/2018, 19:02:43 UTC
There will be much less possible cost-effective investment projects. The economy will shrink.
Deflation causes the prices of goods and services to drop, So the more the currency deflates the less the reward for the people producing goods and services. The demand will decrease and this will lead to an economic crises. People would stop spending money and start hoarding it. Why buy something now if it will be less expensive tomorrow? Unemployment would become rampant.