Are there any benefits to inflation?

[Ns1]

because I can't think of any

 

[TommyVercetti]

Debt goes down.

 

[MournSanity]

Becoming a millionaire gets so much easier.

 

[silverpig]

You can tell your kids: "When I was a kid, $100 was a lot of money..."

 

[ReiAyanami]

the economic theory behind why disinflation is bad is that means aggregate demand is too low, and hence companies halt production. the federal reserve has an inflation target of 1-2%, the reasoning behind this is that inflation gives labor unions an excuse to demand wage increase, wage increases put more money in workers pockets so they spend more thereby helping the economy.

however if you hold all other variable constant, and increase technology, logically inflation would be negative, hence cutting edge technology items such as computer have fallen from a good computer costing $3000 a few years ago to $500 today.

 

[MrAwesome]

Prices go up ----> people spend less ----> save more money in banks ---->and ultimately interest rates drop ------> therefore more investments are made.

Its just one endless cycle.

 

[ReiAyanami]

the real question is why does the $20 bill look like monopoly money
even andrew jackson is blushing

 

[Ns1]

Originally posted by: MrAwesome
Prices go up ----> people spend less ----> save more money in banks ---->and ultimately interest rates drop ------> therefore more investments are made.

Its just one endless cycle.

how would people spend less if prices go up? it would require more money for us to buy products resulting in less money to put into savings

 

[MrAwesome]

Originally posted by: NeuroSynapsis

Originally posted by: MrAwesome
Prices go up ----> people spend less ----> save more money in banks ---->and ultimately interest rates drop ------> therefore more investments are made.

Its just one endless cycle.

how would people spend less if prices go up? it would require more money for us to buy products resulting in less money to put into savings

I'm not sure why this is.........I must have skipped class the day they were covering this in econ.

 

[upsciLLion]

Originally posted by: MrAwesome

Originally posted by: NeuroSynapsis

Originally posted by: MrAwesome
Prices go up ----> people spend less ----> save more money in banks ---->and ultimately interest rates drop ------> therefore more investments are made.

Its just one endless cycle.

how would people spend less if prices go up? it would require more money for us to buy products resulting in less money to put into savings

I'm not sure why this is.........I must have skipped class the day they were covering this in econ.

Perhaps they buy less but end up spending the same or more depending on how much inflation has occurred.

ups

 

[WinkOsmosis]

Money is worth less.. you pay back your debts with cheaper money.

 

[TheBoyBlunder]

Originally posted by: ReiAyanami
the real question is why does the $20 bill look like monopoly money
even andrew jackson is blushing

Isn't it amazing how he looks less like he does in the few photos I've seen than ever before?

 

[Doggiedog]

They might eliminate the penny?