If every country’s’ money was suddenly not worth as much, wouldn’t there be no effect? Like if the whole word decided collectively to make everything 50% cheaper, but make peoples pay also lower as well. Wouldn’t the buying power be the same?
In: 65
That’s not how an economic depression works.
What you are describing is basically a denomination change, which is something that actually happens and generally doesn’t cause too many economic issues. No self-respecting economist would consider that an economic depression.
That said, you are ignoring the effect of savings and investments. People with money saved would instantly be twice as rich. Which just…isn’t going to work. But if we assume that people’s savings are also halved it’s basically a denomination change.
What an economic depression actually is is when there is literally less *stuff* being made. We do measure that in dollar amounts because it’s easier to do that. But the dollar amount isn’t important, it’s the amount of *stuff* that matters.
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