I mean I can't find any collapsing due to deflation, but I know that a good amount of goverments are facing this problem as of right now / or have in the past. Some of these include Ireland, Hong Kong, Japan, UK, and the United States. The one with the biggest problems and I think is still ongoing in Japan, where people are actually accepting negative yield bonds as a way to protect them against this delfation.
Here's a link to the wiki on deflation - https://en.wikipedia.org/wiki/Deflation#Historical_examples
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Topic: Deflation - page 2. (Read 335 times)
Long-term deflation can affect all sectors that harm employers and employees. Deflation can make all parties choose to be silent and not take any action, whether in business, work, until investment.
If the country is deflation the value of currency of this country is increasing. This leads to the fact that the products of this country becomes uncompetitive on the world market. Through the time of decline of the economy. Now America is artificially lowers the dollar to reheat its economy. This is a response to deflationary processes. Within the country unnoticed. But in other countries, the dollar increase was noticeable for a long time.
There is a term called Recession. Recession is defined as the significant decline in economic activity bringing it to the lowest of the last 6 years which leads to Deflation. So, deflation isn't directly a reason of economic crisis. But is a result of recession, an economic crisis. The global recession of 2007-2009 is one such example.
Deflation can precede a crisis (thus being a reason rather than a consequence). One example is the economy in the UK during the 30´s in which deflation was cause instead of effect.
There is a term called Recession. Recession is defined as the significant decline in economic activity bringing it to the lowest of the last 6 years which leads to Deflation. So, deflation isn't directly a reason of economic crisis. But is a result of recession, an economic crisis. The global recession of 2007-2009 is one such example.
We always hear about economies collapsing due to inflation. Can anyone give me one example of an economy collapsing due to deflation?
Sure, there are a few examples if you care to google a bit. One of the ones that are more studied is the Great Depression, not on why it happened (bubble + leverage buys) but also because the wrong monetary policy led to a deflation.
As you may know, deflation is due to scarcity of money and creates a preference for savings againts spending that depresses the economy.
We always hear about economies collapsing due to inflation. Can anyone give me one example of an economy collapsing due to deflation?
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