This book analyses the causes and consequences of deflation. In contrast to the widespread
belief that deflation would be harmful to the economy as a whole the author argues that free
market deflation is liberating and beneficial. Several myths of deflation are exposed and the
reasons for the widespread deflation phobia that serves to justify expansionary monetary policy
i.e. inflation are investigated. Two historical case studies the growth deflation in the US
after the Civil War and the bank credit deflation in Germany during the Great Depression are
discussed to illustrate the points made in the theoretical analysis of deflation.
