ABSTRACT
For reasons that are almost too obvious to mention, deflationary monetary disequilibria have received much less attention than inflationary ones, particularly by Austrian-oriented economists. Deflation is not anywhere near the real-world problem that inflation is, thus it has frequently been given short shrift in the literature. Deflation’s relative absence from modern economies is a result of the near-universal phenomenon of government control over the production of money. Inflation happens far more frequently than deflation because it is in the interest of revenue-maximizing governments to use the banking system as a source of seigniorage, giving central banks that have political oversight every reason to err on the side of inflation.1 In addition, the short-term effects of inflation are such that the economy appears to be doing better, enabling political actors to cash in on those benefits before the bill comes due down the road.
