Topic: Are Inflation and Deflation the Worst Economic Threats? - page 2. (Read 546 times)

When it comes to ultimate threats that affect the economy of any country or region, I doubt any between inflation or deflation would wreak as much havoc as natural disasters or something like a pandemic or war.
These has great effect on how a countries economy and recovery may become met with inflation or deflation as an after effect of the current situation.

Yearly is to much it's now weekly you can not exactly the same thing the same price again this shows the level at which inflation is going and it is getting seriously out of control and it's now as if no one have control over it because this is an intentional problem and it as gotten out of hand no one can do anything about it because even does that created it are clueless and they are even making it worse. A lot of people are finding it hard to afford most of the things they need and they buy the one they can and leave the once that they can not afford. Everything is out of hand.

I don't think anything will even get cheaper now because their is a chance that people will not be able to afford so many things and the rich will lord over the poor and the average people and we have  seen a lot of that in the movies, when you see the rich taking over because of the inflation and their are limited jobs to earn from, if you have a job then you should be lucky. Because sooner or latter you will not be able to work because robots are taking over soon   their implementation that advancement and those are the things we are already suffering from.

it isn't the worst economic threat as long as it's controlled deflation/inflation I think, I'm no economic expert but the thing in keeping economic stable is controlling the inflation at low rate so that it increases circulation of money so the entire country's economy is running.

I've seen many people points out about the danger of deflation and I agree with their take, aside from that, the unemployment and so on I think is the product of many factors not limited to inflation.
but if the economy is worsening, the inflation rate is so high it's abnormal, of course the unemployment rate will also sky rocket. economy i think is always finding equilibrium.

Indeed The economic crisis resulting from poor purchasing power, high unemployment rates, and dwindling social functions is of course a challenge to the stability of an economy. As it goes further that economic growth is still in the negative zone then the ripple effect of such condition will be manifest in the commercial world and in the public domain. Of course, continued deflation only exacerbates this problem, as many businessmen have to reduce their prices until their companies go bankrupt, and there are more jobless people as a result. We can all grasp how the existence of global uncertainty that has affected has left economic actors overly concerned on the outcome of the future.

Thus to combat this complicated situation some measures like rate cuts are highly essential in order that they get ready to invest or expand their business again. And so, we are able to generate human employment and can get people moving again in the economy. Also, direct government securities like bonds could also be one solution of increasing Money supply which will help boost people’s purchasing power. While solutions such as this one require time in order to effectively cause substantial shifts, much more effort and perseverance is needed if we are to begin rebuilding the economy from the effects of this crisis.

People's purchasing power decreases, economic activity weakens, the intermediation function weakens, unemployment increases, social activity weakens, etc., finally GDP decreases, economic growth continues to be negative, this is a dimensional crisis and global economic uncertainty haunts economic actors. Of course this greatly affects the economic stability of a country.

What is certain is that negative inflation or deflation is inflation that is not good for a country. There may be other factors, but the most visible is between the two. Therefore, if not handled immediately, a deflationary spiral will emerge, the peak of which can spread to the food sector. This deflation also makes entrepreneurs have to lower their selling prices until they finally go bankrupt and do not dare to open businesses again, resulting in many people being unemployed.

Therefore, the way to overcome this deflation is to lower interest rates from banks so that entrepreneurs dare to open businesses that allow people to have jobs again, buy government securities such as bonds that can increase the amount of money circulating in the economy. However, as you said, although this problem has a big impact on a country and the government is trying to solve it by taking good steps, it takes time to solve it.

Of course these are some of the factors that can affect a country's economic stability during inflation and deflation. Just look at some of the events that happened in previous years where both of them killed many things and affected a country's economy.

All wrapped up in one big issue, inflation, deflation and political stability can magnify the problem so that the country can create a large gap. Lack of purchasing power due to unstable money circulation in society becomes a problem and conversely there is large unemployment for the affected community.

All lines become a threat to the country if they are related to instability, these issues become more prominent after several events that are difficult to resolve. Although in the end the government will try to take steps to resolve it, sometimes it cannot be done in a short time.

I have to agree with you, political instability at this standpoint is the worst economic issue. Inflation happening is because there is no strong governance to regulate the economic affairs of a country. Inflation or deflation means the government is not handling the economic aspect properly, and that boils down to a really disturbed leadership.

Just like you said, the political instability we are going through currently is what's causing a lot of economic harm, is the cause of lots of unemployment. Structures are not being put in place to employ recent graduates, low pay, no proper plan to increase workers' wages, poor healthcare, and poor international trade power, everything boils down to political instability.

If the government of a country is organized, then a lot of things can be managed. So yes, inflation is bad, I mean things are just on the high, and deflation too is terrible but you see, the moment where a country does not have good governance to even look at these issues means it's just going to keep getting worse. Anything happening in international countries will affect your own country and affect your currency too.

Eventhough inflation destroy purchasing power and deflation halt economic activity, both of them is not always the worst threat to economy. This year I could say that worldwide inflation is stabilizing, but the main threat currently is political instability in some region, the income gap that is getting wider and wider each day, and massive unemployment in many countries even in some developed country. These issues fire up unrest from France to Brazil, leading to strikes and riots that harm economies worse than inflation in and of itself.
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Increasing inequality and unemployment create social unrest in several systemically important economies, thereby creating other varieties of risk for companies and retarded investment, which has potentially devastating consequences. These considerations make it plain obvious that whereas inflation and deflation have been paramount, they are not alone the threats facing the world at this point.

The worst thing that can happen to a country is political instability. It could lead to conflict which would cause economic decline and discourage investment in the country. Other economic conditions can be managed by applying the right policies but political instability can lead to inflation, unemployment and inequality. Inflation or deflation are the outcomes of a country's poor handling of the political and economic environment.

Most multinational companies in my country are leaving because of political instability. Each new government that comes in changes policies, and it is affecting the operation of these big firms. Their departure also made our country earn fewer dollars, which reduced our foreign reserves. The reduction of foreign reserves is causing inflation. These multinationals used to employ thousands of my countrymen who are now jobless because of their departure. Political instability, inflation, unemployment and inequality are all interrelated and interconnected.

High unemployment, political instability and income inequality can be all products of inflation and deflation. What you need to consider is that in economically context, most events happen in series or in cycle. In short, one thing always leads to another. They are all interconnected and you will find that one thing causes another to happen that will cause another thing to happen and so on and so forth.
Like I said they are all interconnected. Political instability can contribute to inflation and deflation too. It's important that in the broader sense, we all look at the factors involved and try to balance everything not only focusing on which ones are more "detrimental"

I guess you could say this is why economic crises are so difficult to solve it is because it can not be only pinned to one thing or one cause. You have to consider all aspects of the economy.

Recession/depression is a bigger economic threat than inflation/deflation. The good thing is that governments have evolved and they know how to deal with recessions/depressions, by using the instruments of fiscal and monetary policy. John Maynard Keynes told us how to solve the problem, when the country is facing an economic downturn.
Another big economic problem is the "poverty trap" which is very common in the underdeveloped countries. The population is growing faster than the country's GDP and this creates greater poverty. The government doesn't have enough money to invest in education and healthcare, which heavily decreases the quality of life in those underdeveloped countries.

Every year theres an increase in the percentage of inflation and a country needs to control the economy properly because they cant make the balance for the inflation the price of the needs of the people will get increase and still they have the same amount of salary they will get shorten with their financials also if you will check only a small amount of percentage every year people increase on their salary and include here the number of taxes they need to pay. Regarding with deflation seems people will agree on the bottom line that they can now afford things but if the cheaper the price the higher the chance they get small GDP if they will tally at the end of the year so if this is balanced people will easily can adopt with the changes and they didn't need to suffer too much. Seems only the upper class and higher-middle class can afford to survive with the inflation rate at least.

Deflation is far worse than you think, just because it grants you cheaper goods it also comes with an avalanche of  other effects. For example, cheaper goods mean lower wages paid, right, because there is not point in selling a pizza for half of the price and still paying the delivery by the same,  lower wages mean also less consumption and as prices go down people are not keen on buying stuff like houses or land or cars, meaning unemployment in the construction sector in the industry, and then a death spiral like it has happened last century.


Yeah because Japan in a deflation period having a higher GDP/debt ratio than Argentina experiencing 200% inflation is obviously an example of that.

A lot of businesses have suffered just because of inflation, and at the same time has made the global market to be unstable because if you look at the global market everything is affected I know the experience of every country will be different. inflation has a lot of effects on the economy and not only on the economy it reduces demand because not everyone will have the money to be able to buy, and even those that have money to buy will reduce the quantity just because they want to cut cost, and at some point it brings confusion because as the experts are seeking solution the same time they are creating more problems. so inflation cause more harm than we can think of, inflation also affect the currency of a nation, and the remedy i see experts gives does not look useful for me the only one i see is to leave with it because even people we are hoping for them to give us solution is no longer their concern what people are going through.

Inflation is a common factor behind the worst things we mean here. In my opinion the high unemployment rate because the difficulty of getting a job is a special factor and the worst in the economy of a country.
The country can run normally if the object in it gets ease in getting goods.

For me when viewed from the definition of both, then the two are not the main threat even though it is peeled deeper, it can include the main threat in the economy.

Inflation is not entirely bad, a high level of inflation is bad, but if inflation is at a low level, it is okay for the economy. I have read from numerous articles that deflation is worse than inflation, though to some people who are looking at it subjectively, it is not possible, but it actually is, if the prices of goods and services is reducing and the value of money is rising, it basically means people are not spending money, but rather are hodling onto it; this would drive so many companies out of business and cause serious unemployment.

That being said, it is now up to each and every country to find the balance, and that is were some do it better than others, and that's why we have healthy economies, and some that are in a terrible state.

Inflation and deflation, bro, those are the obvious monsters everyone's scared of. They're the economic boogeyman. Inflation consumes your money, therefore increasing the cost of everything. And deflation sets off a vicious circle whereby companies collapse, consumers stop spending, and the economy collapses as well

But there are other threats lurking. High unemployment implies millions of people are suffering. That sort of desperation fuels social unrest. And political can destroy an economy. A corrupt or inept government throws the entire system off. And income inequality, man, that's a cancer. The rest of us are left battling for leftovers when a small proportion accumulates all the riches

So yeah, inflation and deflation are serious. Still, there are other games in town. We have to realize how all these different variables interact: unemployment, instability in politics, income inequality. Since that's the secret to create a very strong economy. It's not just about controlling prices, it's about creating a system that works for everyone

"Worst" seems like a bit of a stretch, we can't really calculate the situation in data, like which one is the worst because when one thing happens, usually other things happen as well. In reality, we could say that there are very few nations in the world who doesn't hurt from wealth gap as well, so we could say wealth gap could be the biggest trouble.

When you say that wealth gap is an issue, people think that you are automatically a communist, which I am certainly not and have never been, on contrary I am a liberal who believes that governments work is very minimal. But I also believe in UBI, like nobody should be starving on the streets, if we can have a nation of people at bare minimum who have a place to stay, food, some education, and some healthcare, then rest could be a big gap, just cover those basic human needs.

It's very short term thinking - inflation and deflation have been around for a long time, we were very lucky pre-covid to have such a persistent and long time where inflation was relatively low for most countries. Deflation is rarer although Japan suffered from it for a long time. The next economic disaster will likely come from something completely unexpected and it's hard to even think up, just like the financial crisis in 2008 or the dotcom bubble around the year 2000. They pop up in unexpected ways and reek havoc, but it feels like inflation is being tamed right now. Something stupid, like China invading Taiwan, could set off a disastrous chain of events causing it to spike again but we just have to take it day by day and hope for the best.

I'm just like you that not an economist but I think it was only inflation is the ones that can destabilize a country or the ones that is a threat to it and not deflation because it was the opposite of it (inflation) which means it can help us to bring back the low value of the goods again, or can bring us the true power of our local currencies again. Apart from the inflation, I know there is also recession but I think both are correlated with each other or the other won't be triggered if without the other. I was going to stop there because I don't know any more or forgot the others, not until I continued reading your post and stumbled upon that "Political Instability".

I think in other words this can also be called as a corruption, or simply poor governance because they can lack in knowledge on how to handle the issue of the economy. Indeed, Inflation/recession must be the ultimate threats because it is experienced globally from time to time.