Deflation can be described as the wide-ranging decline in the cost of goods and services when the inflation rate hits the negative. Inflation, in its very nature, decreases the value of a currency over time while deflation increases its value because of a fixed supply, creating a form scarcity for the money. While deflation may refer to the general decline in goods and services, it can also refer to the increased purchasing power of a currency. The perception of deflation in the contemporary financial system has been very divergent historically. There is, for instance, the Friedman rule which doesn’t actively promote ... (full story)