Not All Deflation Causes Suffering

Source: Cafe Hayek
by Don Boudreaux

“U.S. industrial output skyrocketed in the decades immediately following the Civil War. It rose in 33 of the final 40 years of the 19th century, nearly all which 40 years witnessed deflation. One result was that annual U.S. industrial output in 1900 was nearly 7.5 times higher than it was in 1860 — a result explained by population growth. On a per-capita basis, industrial output per American was about three times higher in 1900 than it was in 1860. Also increasing during those four decades was agricultural productivity. With a stable supply of money chasing ever-more goods (and services), the natural result was a falling price level. And it’s a result that deserves applause.” (09/16/22)