Chart of the Week 01 May 2015
The violent cycles of inflation and deflation in the 19th and early 20th century were followed by persistent by persistent inflation in the most recent 70 years. Currently we are in a period of deflationary pressure. I will discuss why inflation and deflation occur. It is not because prices go up or down; price movements are the result of inflation and deflation. If we think of wet streets as a metaphor for prices, we can remember that rain causes wet streets, not the other way around.
Inflation and deflation are discussed in the video following the Read more >> jump.