Can they ever be reset? Or will one day a regular chocolate bar cost for example €50? House that costs €200k cost €1,000,000? Will the likes of the euro or US dollar one day be the same as currencies such as the YEN where “1” of them is essentially worthless?
In: Economics
Sure. In the US, prices fell about 27% between 1927 and 1933. Or, the value of the dollar increased by about a third.
The years there should be a clue. When the value of currency gets stronger, that’s deflation and it goes hand in hand with catastrophic depression.
I think people imagine deflation as a time when you just keep right on getting $75000/yr and are happily watching all the prices get cheaper. But in reality, one of the prices that gets adjusted downwards is the price of your labor.
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