Inflation or deflation?

Everyone thinks that inflation is the most devastating condition for any economy. In reality, deflation is a worse macroeconomic condition than inflation. In fact, in the event of negative inflation, in a context of liquidity trap, where consumption decreases drastically, a further reduction in nominal interest rates often does not prevent an increase in real rates, with a consequent change in the slope of the IS curve, which becomes positive. Therefore, an expansionary monetary policy, such as an increase in the monetary base or a reduction in interest rates, paradoxically leads to a decrease in income, obtaining the final effect of a restrictive monetary policy.

#Economia #Macroeconomia #Indici #Forex #MetalliPreziosi #MateriePrime #Obbligazioni #RendimentiObbligazionari #Finanza #MercatiFinanziari #AnalisiTecnica #TeoriaDelleOndeDiElliott #ModernElliottWaveTheory #Correlazione #CorrelazionePositiva #CorrelazioneNegativa