ABSTRACT
Inflation exists in a country whenever the supply of money and of bank deposits circulating through cheques, so-called "deposit currency", increases, relatively to the demand for media of exchange, in such a way as to bring about a rise in the general price level. During the World War, although it was nominally on the gold standard, there was a decided inflation in the United States, due in large part to a great expansion of deposit currency. The United States had bimetallic deflation for most of the time from 1820 to 1832, paper money deflation from 1865 to 1878, and gold deflation from 1879 to about 1893. "Reflation" is a word coined in the United States by the present economic depression. It means to inflate the currency "back" so as to restore a pre-existing price level. Many of the economic recovery devices adopted by the Government have been motivated particularly by the desire to bring about this reflation.
