If you’re living in Europe, deflation is already here. Deflation means that inflation is plunging, so prices are dropping.
So what’s the big issue? If rising prices (inflation) are generally considered a bad thing, then shouldn’t falling prices (deflation) be a good thing?
Well, yes and no.
Economics professor Ed Dolan is on hand with an easy-to-understand presentation (no economics degree needed), showing the circumstances in which deflation can be a good and bad thing.
We’ve republished the slideshow with Dolan’s permission here, and you can check out more fantastic economics presentations over at his blog.