Topic: Are Inflation and Deflation the Worst Economic Threats? (Read 546 times)

Inflation isn't an issue when it's controlled, and hyper-inflation or deflation are symptoms/causes, not some external threats by themselves. Those several other issues you mentioned could impact the economy in a way that they could be a part of issues causing that hyper-inflation or deflation.

And what do you mean by "worst"? In what way? I don't think that it's constructive way to think economy to focus on what's "worst" threat for it, but on the fact that it's a really complex system where every part is required. Healthy economy has all the parts moving and it's build on resources and relations, but without resources, what ever they may be, economies won't thrive. So if i would have to pick worst thing that could happen to any economy, that would be lack of resources, and people are already preparing for it. Some people don't think it's a problem, because they think that lack of resources is probably not the issue that impacts the world during their lifetime.

I will talk about inflation and as we know it's one thing that has gradually been increasing all these while and is on a regular basis and yet it's more manageable than that of the political hindrances, in fact some of the political issues is what attributes to inflation where they aren't open to carry out their duty effectively than their personal interest to loot and if you check Nigeria you would see that what we are talking here is a reflection to what we are experiencing today.

They can be very dangerous, but it's usually the speed that they happen that throws everyone off - when you get rapid movement in them, it can majorly disrupt supply chains because there are lots of fireworks popping off unexpectedly through the manufacturing and services involved. There is a great danger that you get caught in a cycle downwards or upwards as well, where companies are forced to raise prices due to materials increasing, then labor costs to stay competitive and it needs to be arrested or it will keep going. That is why the central banks have to act and seem to have found the acceptable balancing act this time around, however countries like Zimbabwe (hyper inflation) and Japan (stagflation) are examples everyone is trying to avoid.

Definitely inflation have been an irristible factor to every economy growth but then there are other factors that serves as a threat to the economy, so I believe inflation is just a natural phenomenon that ought to be experienced by any growing country.

Well spoken here. An economy with no balance in the system would crumble. And funny enough such system cannot exist in this era. There must be the poor and the rich to create a balance economy. But in the meantime, an economy where inflation and deflation is a problem is one which those who attempt to progress cannot progress. Because in every country we get to see people who strive to get out of their country. Now the different between countries where inflation and deflation is not a threat and where it is a threat is that. To where it is a threat those who strive and push to get better will always be attacked by inflation every month. Many countries inflation increases more than 20% every month. Such economy no one can be able to grow or get better. But in a country where its not a threat, you see people being able to come out of poverty, especially those who put lots of effort to overcome. Even if inflation and deflation cannot be completely favorable but it should not increase faster than the efforts of every individual.

With inflation and deflation, all those things follows like hike in unemployment which is obviously due to the lack of profits in the business sector which again points out the financial instability and flawed political policies and system. I am not an expert either but I do read a lot of finance and from my understanding small inflation is better than deflation and that's essential to keep the circulation of currency that will increase the spending nature while contributing to the economical growth.

Both inflation and deflation are problems that greatly influence or have an impact on a country's economy because both inflation and deflation are interrelated between the two if something happens to both of them must be controlled immediately. So it can be said that yes, inflation and deflation can be bad things for the economy in every country.

If there is high inflation, it can make people have to spend a lot of money to buy goods and services. If inflation is not controlled it can hinder everything, then it will have an impact on the economic growth of a country.

Deflation can also cause problems with demand, investment, and of course will increase unemployment. However, between the two, the most difficult to control is deflation because it is a serious problem among other problems that have an impact on the decline of a country's economy. Other factors certainly exist, but these two factors play a major role in hampering the economy.

Economic depression is worse than just inflation and deflation. A situation where nothing is working in the the country, all sectors of the economy are affected, there is high rate of unemployment, inflation, deflation, high cost of living, poor standard of living and many more is not what any country should wish for.

Although some factors like war and natural disaster which are beyond our control may cause economic depression, in most cases they are as a result of the government's carelessness and some poor economic policies put in place by the government. Those little acts of corruption the government and its people are condoning, those important aspects of the economy they are neglecting might generate into something serious and before they could be ready to fix it, lots of damages have already been done.

Some countries are already walking into economic depression. Only if they realise on time, they can fix some of these problems and save themselves years of severe hardship.

Anything you mentioned are just subsets of inflation and deflation. Let me explain, if there is unemployment then there is gong to be less available jobs for people and that means low productivity with equivalent low availability of good and service and that means no competition, there is going to be increase in price of things which will lead to inflation and if there is political instability, there can be a war which can also lead to inflation because things are going to be scarce and readily available.

Every thing that happen in the economy will always be surrounded by inflation and deflation but most of the time, inflation occurs mostly due to political instability, unemployment, high circulation of currency, famine, natural disasters, war, biological weapons and many more. All these can give you nothing but inflation and kills economy faster than you think.

Income inequality is at its highest point since we can measure such data, and while this brings instability to the system, the fact that so much money is concentrated in a few hands and those people can influence politicians with ease means that the system will continue as it is until it crumbles down, and the same is true for unemployment, as with the advent of AI, it is likely unemployment will keep growing out of control during the next decades.

Yes I think inflation and deflation poses large threat to an economy, because one of the number one factors of inflation is to reduce the purchasing powers of the citizens, what could be more detrimental than citizens not being able to afford goods and services at a moderate level.  inflation specifically has a multiplier effect as it affects productivity, hence there's no demand in the market, production reduces by certain percentage. High unemployment rate, political instability all have their side effects in an economy as they contribute to economic uncertainty but not as dangerous as inflation and deflation.

Every government problem affects the economy like that high unemployment he mentioned. But for a huge country like US, its not just the inflation that causes the economy to crumble. The policies more than likely that affected it more.

When they decide to move their manufacturing companies to China because they want globalization and all. It became a problem since.

Inflation and deflation has their own threats as other factors also have their own threats but I don't think they're the worst things that can happen to an economy. What I think is the worst is when an economy becomes so stable that it begins to become a victim of it's own success.

Just imagine an economy that everything is working so fine that everybody is rich and there are no poor or middle class citizens to do the low class jobs of keeping the streets/road clean. The sewage system, garbage disposing and the rest of the low class jobs that the rich won't want to do.

For an economy to be working perfectly, things have to be balanced (we need the Poor, Middle class and the Rich). Inflation and Deflation can destroy an economy and it can also build it up depending on how we respond to them affecting the economy.

It certainly does affects the economic growth and personal economy of every human being. The purchasing power decreases when inflation rises.
And we don't need to guess when it will happen because I think before most of the reports were being done annually on how much inflation does.
This time, I am seeing monthly reports of it which is freakin' crazy. Soon, we might get a weekly report and then a daily report of inflation increase.

Inflation and deflation has a role to play when it comes to   economic growth this factors can go as far as  increasing the level of financial instability and also affect the standard of living of the people . It also  has a way of distabilizing a currency value thereby making it unstable in a way.

We all are thinking inflation and deflation are the major threats of the economy but little do we know that alot of things we face each day are threats to the economy, and it's all because of the rise in goods and services that make us see it that inflation is the problem whereas it's not, for me when you talk about threats we look at the insecurities in the country that has caused alot of people's lives and properties, look at the unemployment rate thereby making it difficult for one to provide for himself and family leading to  alot damages as well, and many more, if we can tackle those one then inflation and deflation are minor.

Inflation & deflation are very real economic threats. Inflation erodes purchasing power which leads to uncertainty & decreased consumer spending. Deflation can cause a slowdown in economic activity increasing the real burden of debt & discouraging investment. Both can disrupt economic stability & growth making them big concerns for policymakers.

That is the condition of activity that occurs when inflation occurs and basically the lower classes will be quite affected by this condition even though people who have financial stability will also be disturbed. That is why there needs to be a solution for the government when economic conditions get worse so that lower classes can get solutions to the problems that occur.

When the food sector is hit further due to inflation, a country will have quite a problem because food is the lifeblood that needs to be kept stable. The scarcity of these needs will be quite problematic and the absence of a solution that can be done will worsen the condition. The decline in prices caused by deflation is inseparable from the decreasing purchasing power of the community due to the problem of not having money to meet these purchases.

Any effort must be made by the government because the guarantee of people's lives is better regulated by law and I think every government must find a way to solve it even though it sometimes takes time to stabilize. Furthermore, the role of each individual is also very much needed so that inflation and deflation can be emphasized to be resolved more quickly. There will definitely be an impact after the normalization of the situation that has not gone well and that's where the role of many people is needed to reduce the numbers.

Inflation is main thing that effected all countries of World but that is time for every country to stand because there is no pandemic and no epidemic but only there is freedom in many countries. The countries which are free ,these can grow and these can became their name on International level. Bangladesh economy is strong and that government is giving allowance to the business and there is more prosperity as comparison to Pakistan . USA government is applying the taxes on the poor people and that is big reason of their slow growth. And they have to change their strategy for the establishment of country.

I wouldn't say "worst", because they are known stuff that we already can see beforehand, so we faced them multiple times. I am not that old and even I have seen both of them more than once so far, and I have to say they are not really that tricky to overcome. First time it happened to me, I didn't know what hyperinflation meant, I never seen one, so I couldn't really react, and it was a terrible terrible period for me, but second time it happened, I was more ready, I didn't made any profits, but I did benefit from it in the sense that I didn't get any crashes and debts and all, so didn't get better but not worse neither.

Next time, I have plans to be ready for it, and I am checking to see how I can do it, if it happens before I am ready then I will see same result as second time, but if I can get ready before it happens, I will make a huge profit too. Maybe it's a bad idea, maybe I shouldn't do it, but I am pretty ready for anything to go wild this time.