The Myth of “Good” Inflation and “Bad” Deflation

9 min read

The myth that inflation is a “good” thing has become quite deeply entrenched over the past decades. Its proponents insist that it indicates a high level of consumer confidence and demand. At the same time, they also argue that deflation is extremely dangerous, because it significantly reduces the ability of borrowers to service their debt. This myth is directly linked to another myth that consumption is the engine of economic growth. The roots of  both myths can be traced back to the 1980s. This was the time when the world economy saw the launch of widespread financialization that supported debt-based…...

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Olegs Jemeljanovs, PhD, CFA A seasoned professional in the field of financial markets, investments and economic analysis with the crucial mix of private and public sector experience (large international lenders, private boutique banks, ministry of finance, central bank, financial regulator). Able to cover macroeconomic and microeconomic trends, short-term market moves and long-term economic cycles, the role of biology and psychology in finance. Have held both front-office, sales and analytical positions. If you want complex economic, financial, political, historical, sociological and psychological concepts to be explained in a simple and accessible way then you have certainly found the right website. If your consider the sense of humor to be important then you have definitely found the right man.