Post
Topic
Board Beginners & Help
Re: Hyperdeflation, own half the world by headstart - don't you care at all?
by
wogaut
on 27/03/2012, 15:38:33 UTC
 Ahh, no.  It's not.  That would be currency appreciation, not deflation.  I don't understand why this concept is so hard.  From an economic perspective, deflation is a (relative) reduction in the monetary base in circulation.  Changes in the value of the currency/the prices of goods in that currency is often a symptom of deflation or inflation, but changes in the monetary base are not the only (or even the majority) reason for such visable symptoms.

Hope your cough gets better soon MoonShadow.

Deflation/Inflation have a simple definition: Change in money supply over growth rate of supporting economy.  
(there's actually also the other definition that the CPI uses).
Important is the rate of change. Money supply doesn't need to shrink to cause a deflation; if the economy grows at a faster rate than the money supply, it is a deflation. But that's nothing new, it has been discussed up and down everywhere. If you like to call it 'currency appreciation' based on your diagnosis of 'symptoms', whatever. I guess you just want to emphasize that inflation is not necessarily equal to rising prices according to the classical definition of inflation, that's fine with me.