Linked Questions

0 votes
1 answer

Does the tech sector show that we can live with deflation?

Technology has been incredibly deflationary in the past century. A thousand dollars buys you a better iPhone this year than what was available last year. If you want a 60-inch TV, you could get it for ...
Nayuki's user avatar
  • 103
3 votes
1 answer

Do we have an authoritative reason why inflation is bad?

We all know high inflation is bad. Bad things happen. However: Do we have an authoritative source explaining why inflation is bad and should be prevented? Has anyone pinpointed the main root cause or ...
Trylks's user avatar
  • 143
0 votes
1 answer

Is is possible that two economies have the same real interest rate, same GDP growth, but different inflations?

This is just a conceptual thought experiment. Is it possible that two countries have the same real interest rate, same GDP growth, but different inflation, one higher, one lower? If that's possible, ...
CuriousMind's user avatar
1 vote
1 answer

What is the rationale for setting a 2% target rate for inflation

I have what I think is a simple question, but just like 'how do you balance a checkbook' they don't teach it in school. The only similar question I found was this: Is there any scientific proof that 2%...
stu's user avatar
  • 119
4 votes
2 answers

Relation between budget deficit and inflation?

In Iran we have had a high inflation rate for several decades (usually above 20 percent). Some of the top economists of the country say that it is mainly because the government spending is ...
apadana's user avatar
  • 193
1 vote
1 answer

Why isn't high inflation along with robust welfare a 'good' system?

High inflation, by definition, means that the demand for goods and services is higher compared to the demand for currency. In other words, people are more willing to give up currency for goods and ...
Ritesh Singh's user avatar
2 votes
3 answers

Why is deflation bad for economy? [duplicate]

As now many people are talking about the inflation of US dollar on the account of the COVID-19 pandemic and the printing of trillions of US dollar bills, the price of decentralized cryptocurrencies ...
Fabio Mendes Soares's user avatar
2 votes
2 answers

Why should prices come down (in theory) in an educated society with a well-run government?

In Chapter 1 of Robert Kiyosaki's "Rich Dad, Poor Dad", the rich dad says: "In an educated society with a well-run government, prices should actually come down". Is there any ...
Kal's user avatar
  • 121
1 vote
1 answer

How did the silver standard "insulate" China from the beginning of the Great Depression (1929-1931)

There is a segment from this article that I want to unpack: The Great Depression was a global crisis—almost. Every significant economy was devastated, with one notable exception: China. The reason ...
Arash Howaida's user avatar
26 votes
4 answers

Could eliminating all taxes and only creating new money theoretically work?

Imagine you had the opportunity to found a new country from scratch (in 2020). Value exchange would be digital, where only the state can create new currency units. Instead of relying on income tax ...
Nico's user avatar
  • 369
1 vote
1 answer

Why, in general, do product or service prices rise in time? [duplicate]

My question is simple: Why is it, in general, that the prices of products or services (regardless of demand and supply) are always on the rise in western society? For example, the rent we pay ...
Deschele Schilder's user avatar
2 votes
1 answer

Why is an inflation rate of 2% optimal? [duplicate]

Learning from different sources I got the impression that the European Central Bank targets at a inflation rate of 2% (not sure along which time scale actually). Can it be explained by general ...
Hans-Peter Stricker's user avatar
0 votes
5 answers

What is the point of a constant (thus known) inflation rate?

I have read somewhere (attributed to Milton Friedman) that a good practice of monetary policy is to maintain a constant inflation rate (of 3% per annum, say). What is the point of that? If everyone ...
Hans's user avatar
  • 189
0 votes
1 answer

Why do central banks print money? [duplicate]

If a country's central bank prints money, it causes inflation. However, apparently, small amounts of inflation is a good thing. Why is the case? What would happen if central banks stopped printing ...
Mahkoe's user avatar
  • 101
5 votes
1 answer

How and on what basis the inflation target is determined?

I have a question at the intersection of Economics and Politics. Every country has her own inflation target. But who, how and on what basis is it determined? Of course, we know that too big inflation ...
Kamil Jędryczek's user avatar

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