Okay so as far as I’m understanding it, we have (and also want to have for economical reasons, the amount can be discussed but in general we want that) inflation. Therefore money becomes always less and less valuable, the ice cream will always cost more and more. Can you reverse that process without going into recession/deflation? So will there ever be a point again, at which an ice cream will cost 50ct again (random example)? Can that be reversed by introducing a new currency?
In: 2
This is called *deflation*, and it is usually awful for an economy because it means your money becomes more valuable if you *don’t* invest it. That means people don’t invest, which kills economic activity – which in turn kills the job market, which kills the economy as a whole. Economies can handle mild deflation for a short period of time, but not much of it, so governing bodies try very hard not to allow it to happen.
The solution you mention – reissuing currency to not have ridiculous numbers – is common.
Latest Answers