ABSTRACT
Inflation occurs when the purchasing power of the monetary unit declines materially. This sometimes takes place slowly over a long period of years and is then generally called a period of good times. Silver taken from America to Europe after the discovery of America resulted in inflation by large additions to the monetary stocks. The only remedy for inflation is stabilization at a somewhat reduced price level, in case the inflated price level has prevailed for only a short time. Deflation is so much more destructive than an equal amount of inflation that it never goes to the same extremes. Reflation is entirely different from inflation. Reflation restores a balance in the price structure. Inflation throws a balanced price structure out of balance. Since the effects of inflation are entirely independent of the cause, the inflation of the World War period was worse than the inflation of the Civil War period.
