Is inflation inevitable in all successful economies? Throughout history, has there ever been a society that maintained 0% inflation for a long term while still maintaining a good quality of life?
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Typical economic policy deliberately keeps a slight rate of inflation.
The reason is that economies are more active when capital (money available for investment) is being actively invested in building up the economy than when it’s being saved in a bank account or a bunch of gold bars somewhere or whatever. In an inflationary environment, people with money are encouraged to invest it, because it will slowly become less valuable if they hold onto it. That produces economic growth, which most governments are trying to encourage. In a *de*flationary environment, on the other hand, people with money are encouraged to hoard it, because it’s becoming *more* valuable over time.
It’s not that you *can’t* avoid inflation, it’s that you don’t want to. (Of course, *too much* inflation is also bad, but that’s another matter.)
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