Deflation, good (good deflation)

A form of deflation in which – prices fall due to strong productivity gains in industry, – but demand cannot keep pace. – If this occurs in an environment of strong growth, firm asset prices and elastic bank lending, it is not harmful. On the contrary, the prosperity of the population increases because the fall in the price level in such a healthy environment would increase the purchasing power of the citizens. – See deflation, deflation, evil, deflation, ugly.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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