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Inflation and Deflation

Inflation

Inflation, the inflation is the state that prices gradually rise for short. For money of the same quantity, it may be said that I compare it in normal, and the value of the money falls down in one (example 1) that you can buy only a cheap thing at the time of the inflation.

(example 1) the car which was 1 million yen became 2 million yen this year last year. This is a state called "the inflation". Then it is said that there was 2 million yen at hand then. Then the thing which was able to buy last year two may buy only one this year. It means that 2 million yen fell from the value for two cars to value for one.

Hyperinflation

The inflation mentioned above happens excessively, and inflation is the phenomenon indicating the abnormal value. A famous thing has a thing in Germany after World War I or a thing in Zimbabwe of modern times.

Deflation

Deflation, the deflation is reverse of the inflation for short, and prices are in condition to gradually fall down. For money of the same quantity, it may be said that I compare it in normal, and the value of the money goes up it in one (example 2) that you can buy a high thing at the time of the deflation.

(example 2) the car which was 2 million yen became 1 million yen this year last year. This is a state called "the deflation". Then it is said that there was 2 million yen at hand then. Then the thing which you were not able to buy will change only one into two this year last year. It means that 2 million yen rose in the value for two from value for one car.

Deflationary spiral

It is a phenomenon caused by the deflation mentioned above. As shown, it is declined the leftover goods → prices of the consumption restraint → product of the salary decrease → individual of the prices fall → corporate earnings fall → individual…It is a spiral of the minus number.