Quarterly Journal of Austrian Economics


The Quarterly Journal of Austrian Economics

Volume 6, No. 4 (Winter 2003)


It seems odd that economists would find the idea of falling prices to be a bad thing. Likewise, it is peculiar that policymakers would fear deflation and be willing to take drastic measures to insure the so-called “defeat” of deflation. Policymakers and politicians, after all, would supposedly want the general public—their constituency—to experience the beneficial effects of falling prices over time. Lower prices create a gain of utility or satisfaction for consumers, who can either purchase more of a good or use the money saved to buy larger quantities of other goods. Deflation thus has the same effect as an increase in income.


Thornton, Mark. “Apoplithorismosphobia.”The Quarterly Journal of Austrian Economics 6, No. 4 (WINTER 2003): 5–18

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