Is better for economy high / low Inflation or Deflation ?
What is better for economy, Inflation or Deflation ?
Is better to have high or low Inflation rate ?
Or is it better to have high or low Defaltion rate ?
For economy and business environment is usually better to have inflation rather than deflation. It is important to have the inflation rate under control. According to many economists, it is good for country to have a low inflation. Optimal inflation rate is 2%.
Very high inflation rate causes a problems to monetary system and it can be dangerous for economy. Deflation is in general considered as not good for economy, mainly in long-term period. It often occurs during economic crises. The deflation increases the real value of debts and it can lead to economic stagnation.