If inflation is roughly 2% per year, wouldn’t it eventually devalue like the Zimbabwean dollar?
In: Economics
you want low inflation like that.
in countries with hyperinflation you could go to work and buy a morning coffee then on the way home the coffee go up in price.
it effects every thing. it makes you rush out and blow your money saving becomes impossible..loans become unprofitable. this collapses economies and why you can see returns to a barter system.
low inflation is good. you get little or no negative effects. while sure things are going up in price saving is still advantageous and investments can pay off.
deflation is bad because then the rich who were able to save end up more wealthy than before. deflation can be ok in short term but in general it’s bad. but not something that normally will happen anywhere anyway.
tldr you want low inflation like 2%
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