Are Inflation and Deflation the Worst Economic Threats?

[stompix]

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.

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.

agreed with this, debt is also one way that become the culprit of economic threat, it also correlate with inflation,

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

[Peanutswar]

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.

[davis196]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy. But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[btc78]

what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation?

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.

Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[Zlantann]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy. But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[icalical]

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.
https://www.maplecroft.com/products-and-solutions/geopolitical-and-country-risk/insights/political-fragmentation-rises-in-europe-srcc-risks-run-high-among-major-economies/

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.

[Yucky]

With inflation, they can just adopt other currencies and go on with their lives despite the rising prices of products. Unemployment also since companies will shut down.

Either of those things will make a country weak. If there is no military power right between the neighboring countries while the other is weak, it's the border issues that arise. One country will take advantage of the turmoil. The war with a neighbor is likely the worst that can happen.

As much as inflation and deflation are major factors in the economic threat, political instability is the worst.

Uncertainty in government policies, changes in leadership, or conflict can create the worst in the economy.

One of the major reasons for the hardship in our country, Nigeria, is bad government, if you may ask me.

The leadership method is so uncertain, and it's had a lot of bad effects on the citizens, which has contributed to making the youth and even other men go into things they vow never to do.

I believe inflation and deflation can be managed compared to an uncertain government where no one is ready to learn or listen to others.

Only the uncertainty government can cause debt, which is another factor, conflict, and also unemployment, which is the major reason I believe the uncertainty government is the worst factor.

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.

[lizarder]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy.

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.

But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[ndutndut]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy.

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.

But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

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.

[MRY]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy.

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.

But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

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.

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.

[TastyChillySauce00]

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.

[Baki202]

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.

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.

[Cryptomultiplier]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy. But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[el kaka22]

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.

[N.O]

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.

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.

[lizarder]

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.

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.

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.

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.

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.

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.

[DeathAngel]

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.

[Oluwa-btc]

 Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[Gentle_Soul]

I am not an economist but from the little I know about the economy, I have viewed inflation and deflation as factors that can destabilize a country's  economy. But I often question myself if they truly the worst things that can happen to a country's economy. Are they? I know how inflation reduces the purchasing power of the people, while deflation decreases consumers spending and holds the economy stagnant. However, what about the other issues like high unemployment, political instability, and severe income inequality aren't they are as equally damaging or even more damaging than inflation and deflation? Do you think inflation and deflation are the ultimate threats, or should we consider other economic factors as potentially more detrimental?

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.

[terrific]

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.

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.