Infographic: What your lifestyle will cost in 2040(futureadvisor.com)
futureadvisor.com
Infographic: What your lifestyle will cost in 2040
https://www.futureadvisor.com/401k/comics/cost-of-same-lifestyle-1982-2012-2040
2 comments
The effect is mainly on people. For example in a period of deflation your pay should go down in order to remain at the same purchasing power. Can you imagine how people behave when told they are really getting a pay increase when their pay goes down by 2% and deflation is 4%? Inflation means prices/wages automatically go down when no numerical change is made. This keeps people happier.
Consequently inflation is preferable out of the two, but a small number close to zero and stable over many years is the most preferable.
Consequently inflation is preferable out of the two, but a small number close to zero and stable over many years is the most preferable.
Neither is strictly good or bad. Too much inflation is very bad.
Interesting, but I'd want to see the costs adjusted for inflation. Of course inflation means things cost 'more', but we get paid more as well.
But most economists say "deflation = bad, inflation = good (as long as it's not high)".
Suppose I have a dollar and I have a choice of buying a hot dog either today or 10 years from now. The hot dog today is already intrinsically more valuable to me, since in ten years I could be dead, or not like hot dogs anymore, or be unable to eat them due to an intervening change in my health, or be unable to find them since they went out of style and no one makes them...I don't need the "encouragement" of inflation to force me to spend my money; I'm already punished for saving by forgoing consumption.