What is better for a country: deflation or controlled inflation?

[Junii]

Controlled inflation around 2% is better. It helps the growth of the economy, reduces the weight of the debts and encourages people to consume, instead of holding the money. Already deflation looks good in the beginning because the prices fall. But in practice it discourages the consumption, increases the weight of the debts and can cause years of stagnation, like happened in Japan.

Yeah i agree with you a stable inflation is good for buyers and sellers and it helps the economy as well also the citizens have good purchasing power because when the inflation is high for example i have a real estate business and i invest $100k then i sell all  my properties and get my money back but now i am not be able to buy the same number of plots when i reinvest that $100k because prices have increased and my purchasing power has fallen. Also deflation can also create problems. If people expect real estate prices has falling in the few days there are chances that they can hold their cash and wait for cheaper prices instead of buying now due to this it reduces demand slows transactions and effect the overall market so to maintain this a stability is better rather then sudden increasing or decreasing.       

[Pablo-wood]

Controlled or predictable level of inflation is by far better than deflation. Deflation can be very deceptive it might look ok for our wallets and balances but in real sense it kills our economy, make businesses suffer and hinder availability of jobs.

Controlled inflation gives consumers the choice to buy their needs early which keeps business running without having much persons hoarding their cash. It also encourages investments and increased wages. I also think borrowers finds it much easier to pay back loans during this kind of economy.

[LUCKMCFLY]

I've lived my whole life in a country with an inflationary economy, and it's the worst thing in the world. I don't recommend it—not even with 2% inflation, or anything like that. A stable economy, for me, is a deflationary one. In fact, Bitcoin's model is perfect.

Notice that Bitcoin has a limited supply, which only makes the currency more valuable over time. By limiting the supply, wealth increases because the value increases. Like everything, there are downturns, but then there are recoveries. In the end, a deflationary economy is much more effective because it eliminates many of the deficiencies and vulnerabilities that the current system has.

[Dareo]

But from the perspective of ordinary people, this controlled inflation also silently takes away the purchasing power of their accumulated wealth in the long run. This system discourages people from saving and forces them to make unnecessary spending or risky investments for fear of the value of the money falling, On the other hand in the Bitcoin or deflationary system, people are encouraged to get out of debt based consumerism and save, which is more sustainable in the long run. Also deflation is not the only reason behind Japan's economic stagnation, their aging population or demographic crisis is also a big reason, In my opinion a healthy economy should not be based on constantly creating debt, but on real savings and sustainable production.

[abhiseshakana]

I've lived my whole life in a country with an inflationary economy, and it's the worst thing in the world. I don't recommend it—not even with 2% inflation, or anything like that. A stable economy, for me, is a deflationary one. In fact, Bitcoin's model is perfect.

Notice that Bitcoin has a limited supply, which only makes the currency more valuable over time. By limiting the supply, wealth increases because the value increases. Like everything, there are downturns, but then there are recoveries. In the end, a deflationary economy is much more effective because it eliminates many of the deficiencies and vulnerabilities that the current system has.

From what we learn and many believes during decades that we need measured and controlled inflation to avoid falling into a spiral of economic paralysis caused by deflation and i think it is a core doctrine steadfastly held by central bankers, international financial institutions, and global policymakers which we know as global elite. They have same interest to avoid massive deflation because deflation can diminished their assets value and increase the debt burden.

As solution global elit create inflation as mechanism to preventing destructive deflation. We know that today economy over reliance on debt, inflation make global debt system running, so it is not only an economic error. So monetary system designed in such a way that moderate inflation becomes the mechanism that keeps the debt and asset ownership system alive and benefited.

Simple explanation deflation makes debt feel larger and inflation makes debt feel smaller. Lets make simulation if we have USD 10,000 debt. On deflation period when prices of goods and income tend to fall, we need extra effort to pay USD 10.000 and it's harder to pay (the real value of the debt rises). On inflation period, prices and income tend to rise, USD 10,000 debt remain the same but but relatively lighter due to salary increase (the real value of the debt falls). thats why deflation can create serious problem because debt does not decrease when prices and income fall. With keep the moderate inflation asset owners are rewarded anf leave the cash savers punished.

[Maslate]

Controlled or predictable level of inflation is by far better than deflation. Deflation can be very deceptive it might look ok for our wallets and balances but in real sense it kills our economy, make businesses suffer and hinder availability of jobs.

Controlled inflation gives consumers the choice to buy their needs early which keeps business running without having much persons hoarding their cash. It also encourages investments and increased wages. I also think borrowers finds it much easier to pay back loans during this kind of economy.

Couldn't agree more. While deflation can be more tempting to hear because prices are dropping low while the purchasing power turns high, but it could be a huge threat to the national economy in the long run. When the business market is no longer making revenues, the country's economy itself will drop and might end up shutting down if the country's government cannot save from the uncontrolled deflation.

Controlled inflation is always better than deflation. But too much inflation is never good at all, negative results are equally the same with deflation.

[TedMosby]

I think it depends on the country, like how powerful the fiat currency of the country is. For example, inflation may be good when you can still import from countries with weak fiat currencies. It may be easier to absorb inflation with a strong economy and currency. Deflation could be bad if you are the one who lives in a country with a weak economy and currency.

In general, I prefer stable and predictable inflation. People will tend to spend earlier, more frequently, make the economy run well, and businesses also can have a better long term plan when inflation is more predictable. I don't like it when prices spike too high and that makes us readjust everything.

Speaking of deflation, Bitcoin's fixed supply, high demand, and decreasing block reward mechanism make it deflationary, right? I think that's also why BTC struggles to work as widely as a medium of exchange. Users tend to hold it, delay their spending, hoping they can get more from the deflation. CMIIW.

[DanWalker]

I've lived my whole life in a country with an inflationary economy, and it's the worst thing in the world. I don't recommend it—not even with 2% inflation, or anything like that. A stable economy, for me, is a deflationary one. In fact, Bitcoin's model is perfect.

Notice that Bitcoin has a limited supply, which only makes the currency more valuable over time. By limiting the supply, wealth increases because the value increases. Like everything, there are downturns, but then there are recoveries. In the end, a deflationary economy is much more effective because it eliminates many of the deficiencies and vulnerabilities that the current system has.

You've never lived through a prolonged deflationary economy, so how can you claim that the current system is much worse?

Good economy not just requires to keep the value of money, but also have enough liquidity to allow the economy to is flexibility for recession, growth, supply, demand shock. 

If the money supply is extremely rigid and cannot be adjusted flexibly to face different circumstances, the economy will be more fragile when a crisis arrives. So Bitcoin may be a good asset to hold, but that doesn't mean its deflationary model would make the economy function better.

[bhadz]

I've lived my whole life in a country with an inflationary economy, and it's the worst thing in the world. I don't recommend it—not even with 2% inflation, or anything like that. A stable economy, for me, is a deflationary one. In fact, Bitcoin's model is perfect.

A 2% of inflation for me seems to be a stable one if it's in my country. Because we usually get 6% to 11% and even more, I am expecting it to be more in the coming months. We've got lesser investors, more businesses are closing thanks to the crucial way of handling business by the government and the lesser support they give to the SMEs. Although any kind of percentage isn't good as long as with inflation but we have no control over that. And this also reflects due to the governance, the policies that they're implementing and self sustainability if ever they are focusing on it. In our case, we should be self sustaining because we've got better lands, we're surrounded by waters but instead, we import and that adds to the painful inflation rate.

[Ashawowo(OS)]

My biggest concern is with maintaining quality of goods accessible for people along the years, which is something not happening nowadays. Prices are increasing so fast that industry started decreasing the quality of the ingredients in order to remain competitive and affordable for the average citizen.

This has a lot to do with the government, increased taxation brings about increased cost of production and these companies are left with no other option than to reduce quality to still make it a bit affordable to their target consumers. Most companies now focus on quantity over quality or taste and the government keep mute about these decreased standards since it benefits them. Inflation encourages consumption since the value is more likely to increase, but higher inflation discourages savings since interest rates are always lower than inflation rate thereby putting the citizens at a disadvantage in both consumption and saving.

People cannot even invest properly since before they can save enough, the funds have depreciated very well and the cost of such investments have skyrocketed.

Question it, would the 2% yearly inflation be enough to allow the average citizen to have quality on his daily purchases, especially the ones related to food items?

If the income increases by at least 2% yearly, then we might be able to see a balance, but we know this is rarely the case, inflation increases by much more than this and income doesn't follow suit.

[Shadiq]

Controlled inflation around 2% is better. It helps the growth of the economy, reduces the weight of the debts and encourages people to consume, instead of holding the money. Already deflation looks good in the beginning because the prices fall. But in practice it discourages the consumption, increases the weight of the debts and can cause years of stagnation, like happened in Japan.

Both inflation and deflation are necessary in an economy, but they must be controlled and within the tolerance of the people.
Currently, inflation has increased so much that if you return home from the market and go back to the market, you can see the price difference or inflation.

The economy we are currently in has made people tired of excessive inflation. Deflation can play an effective role in this economy, but the contraction cannot be excessive. Basically, whether it is inflation or deflation, it is good as long as it is controlled.

[AmaGold70]

What the economy of every country needs is stability both in price of goods, and services, and other things. When people are living without price control it makes an economy very unstable. In every country, the standard of living should be moderate, both the rich , and the poor ones should be able to afford the basic things of life, for instance food, shelter, and possibly clothings. These countries where the government in power is unable to control inflation, the citizens finds things very difficult, and citizens will do all manner of things so that they can survive. Presently inflation has taken over many countries of the world, and in some countries the problem is leadership whereby the government in power prioritize their personal growth instead having the interest of the citizens at heart.

[HelliumZ]

Deflationary measures often become necessary in countries experiencing excessive inflation. While deflation does increase the value of money, it also causes a significant drop in the prices of goods. Conversely a sharp rise in the prices of goods leads to excessive inflation. Therefore both must be controlled managing them effectively prevents undue strain on the economy. In economies that are already weak, excessive inflation inflicts severe hardship on the public.

[Roseline492]

Controlled inflation around 2% is better. It helps the growth of the economy, reduces the weight of the debts and encourages people to consume, instead of holding the money. Already deflation looks good in the beginning because the prices fall. But in practice it discourages the consumption, increases the weight of the debts and can cause years of stagnation, like happened in Japan.

Considering a lot of future circumstances I wouldn't prefer deflation even if it also has some good advantages it gives to people in terms purchases and affordability but however it could even make an unstable economy unbearable for people because there is know how prices will drastically fall that it will not kick people out from their business and that's not what would stabilize an economy but however with a control of inflation it could change many things in the country because people will  live very comfortable and you wouldn't have to be spending different amount of money in one thing because of high fluctuation of prices.

[Swordsoffreedom]

This has a lot to do with the government, increased taxation brings about increased cost of production and these companies are left with no other option than to reduce quality to still make it a bit affordable to their target consumers. Most companies now focus on quantity over quality or taste and the government keep mute about these decreased standards since it benefits them. Inflation encourages consumption since the value is more likely to increase, but higher inflation discourages savings since interest rates are always lower than inflation rate thereby putting the citizens at a disadvantage in both consumption and saving.

People cannot even invest properly since before they can save enough, the funds have depreciated very well and the cost of such investments have skyrocketed.

Taxes are not the only reason. Energy prices, raw materials, transportation costs, labor costs...all of these are putting a lot of pressure on businesses. And trying to balance product quality with a price people can still afford is a real headache for them, its not as simple as we think.

Its the result of a whole chain of factor, we shouldnt just blame the government for everything.

If the income increases by at least 2% yearly, then we might be able to see a balance, but we know this is rarely the case, inflation increases by much more than this and income doesn't follow suit.

If all we need to do is increase incomes by at least the same rate as inflation, why doesnt the government just keep inflation at 2%? Wouldn't that be easier?

But saying its alway easier than actually doing it. If wages keep rising in line with inflation, that can also put more pressure on businesses and push the prices of goods and service even higher. In the end, we could just end up in the same cycle again.

[Synchronice]

Controlled inflation around 2% is better. It helps the growth of the economy, reduces the weight of the debts and encourages people to consume, instead of holding the money. Already deflation looks good in the beginning because the prices fall. But in practice it discourages the consumption, increases the weight of the debts and can cause years of stagnation, like happened in Japan.

Controlled inflation is definitely better for a country but the thing is, central banks can't control everything. The inflation is also affected by oil and food prices, 3rd parties (like war between two or more countries can significantly affect the whole world), labor shortage and so on.

Deflation is the worst enemy to the country. Many people think that deflatino is good because prices go down, things get cheaper and they have the possibility to buy more but it doesn't really work like that in practice. Deflation means that by holding money, your purchasing power increases and you are basically getting rich by just holding, so there is no need to risk and invest in something or spend money.
So, small inflation is the best choice.

[BALIK]

Controlled inflation around 2% is better. It helps the growth of the economy, reduces the weight of the debts and encourages people to consume, instead of holding the money. Already deflation looks good in the beginning because the prices fall. But in practice it discourages the consumption, increases the weight of the debts and can cause years of stagnation, like happened in Japan.

Both inflation and deflation are necessary in an economy, but they must be controlled and within the tolerance of the people.
Currently, inflation has increased so much that if you return home from the market and go back to the market, you can see the price difference or inflation.

The economy we are currently in has made people tired of excessive inflation. Deflation can play an effective role in this economy, but the contraction cannot be excessive. Basically, whether it is inflation or deflation, it is good as long as it is controlled.

Agreed. A healthy economy is one where inflation and deflation are kept under control at reasonable level. Because both can have positive or negative effect depending on what the economy is going through.

The government need to maintain a reasonably stable economic environment so people can plan their spending, investment and business activities.

High inflation eats into the buying power, while deflation may cause people to delay spending and investment. Therefore, the real question is not whether inflation or deflation is better. It is more a matter of what is actually the proper level for the economy.

[LUCKMCFLY]

A 2% of inflation for me seems to be a stable one if it's in my country. Because we usually get 6% to 11% and even more, I am expecting it to be more in the coming months. We've got lesser investors, more businesses are closing thanks to the crucial way of handling business by the government and the lesser support they give to the SMEs. Although any kind of percentage isn't good as long as with inflation but we have no control over that. And this also reflects due to the governance, the policies that they're implementing and self sustainability if ever they are focusing on it. In our case, we should be self sustaining because we've got better lands, we're surrounded by waters but instead, we import and that adds to the painful inflation rate.

Well, imagine in my country, back when we had 2% inflation, it wasn't even noticeable; it went completely under the radar. My country is one of the richest in the world in terms of resources, but in the hands of the politicians we have, it has become one of the poorest today.

So, inflation wreaks havoc in countries where economic recovery is already a struggle. The main culprits behind a country's inflation are the politicians, from the top down. They don't suffer the ravages of inflation; they simply print liquidity to maintain their lavish lifestyles. Honestly, the politicians are the ones who ruin everything; they are solely to blame for all of it.

Failed economic models exist mainly because of this issue—and the voters who elect these politicians en masse share the responsibility.

[Smack That Ace]

Many people think that deflatino is good because prices go down, things get cheaper and they have the possibility to buy more but it doesn't really work like that in practice. Deflation means that by holding money, your purchasing power increases and you are basically getting rich by just holding, so there is no need to risk and invest in something or spend money.
So, small inflation is the best choice.

Because most people are already struggling and are tired of what inflation is doing to them, its no surprise that many people would rather have deflation than inflation.

With a deflationary economy, they would spend less, save more and get richer. But they dont realize its not that simple. When everyone wants to hold onto their money and puts off spending and investing, demand drop, businesses struggle and the economy can slow down. In the end, it can turn into vicious cycle that ends up hurting them too.

IMO, Inflation is still better than deflation.

[stompix]

I think both inflation and deflation have its own benefits, as long as it is control and in moderate.

There is no benefit in deflation, none whatsoever.
People like to point out Switzerland in 2015 as a country that so called benefited from deflation, ignoring almsot everything else, a small country with high reserves, with a tight monetary policy beforehand, with a currency that overappreciated during the crisis, and many many others, just as how low those rates were, 1.5 and 0.5 %.

Deflation, even in small percentages, is destructive; Japan has been trying to get rid of it for a decade and no amount of money printing has helped it has come down to global energy crisis to pull it out of that death spiral.

Both inflation and deflation are necessary in an economy,

Deflation is NOT needed in an economy, seriously, stop spreading stupid things here!