ABSTRACT
The coming of depression is almost certain to be accompanied by some measure of deflation. But, in a system undisturbed by other causes making for depression, there seems no reason to suppose that this process need go very far. In the present depression things have been different. Whether or not revival is on the way, there can be no doubt that the deflationary process which preceded it has been one of quite unparalleled severity. The dangers of a price-fall due to deflation blind people to the dangers of a price-rise due to restriction. The short-run effect of the erection of obstructions to trade is a tendency to deflation. This is perhaps a hard saying for those who have come to look at tariffs as a means of safeguarding the trade balance and so avoiding deflation. Much more damaging and productive of general deflation have been the policies adopted in regard to debts and bad business positions in general.
