This book analyses the causes and consequences of deflation. In contrast to the widespread belief that deflation would be harmful to the economy as a whole, the author argues that free market deflation is liberating and beneficial. Several myths of deflation are exposed and the reasons for the widespread deflation phobia that serves to justify expansionary monetary policy, i.e., inflation are investigated. Two historical case studies, the growth deflation in the US after the Civil War and the bank credit deflation in Germany during the Great Depression are discussed to illustrate the points made in the theoretical analysis of deflation.

Analyses and explains the consequences of price deflation Exposes the myths about deflation and explains the reasons for the deflation phobia Offers a new interpretation of the US deflation in the second half of the 19th century and the German deflation during the Great Depression Includes supplementary material: sn.pub/extras

Inhalt
Introduction.- Economic Theories of Deflation.- Causes of Deflation.- Consequences and Myths Concerning Deflation.- Two Historical Examples of Deflation.- Conclusion.