(I’m American) Inflation is the rising cost of goods and services. Inflation constantly goes up by varying degrees. When economists say “inflation is decreasing”, that just means that the rate of inflation has slowed, not that inflation reversed.
If inflation is causing money to be less valuable over time, why would it be bad to have deflation? Would that not make my money more valuable? I’ve been told it would be very bad, but not in a way that I understand
In: Economics
Inflation encourages investment.
If you’ve got $100 today, but inflation is happening, you need to do something with that money. It’s going to be worth less and less over time. So you’ll want to buy stocks and bonds, or real estate, etc… something to help your money at least keep pace with inflation. And those are only going to get more expensive, so invest now. Sooner you get that money moving, the better off you are.
Deflation goes the opposite way. Don’t spend, don’t invest, just sit on your pile of money. The longer you wait, the more your money will be worth.
Our economy is reliant on money moving around. The government wants/needs you to spend spend spend. Inflation helps achieve that goal.
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