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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Don Lloyd who wrote (11723)	12/9/2001 12:58:30 AM
From: Jacob Snyder	Read Replies (1) of 74559

Deflation: Dictionary definitions I found: a contraction in the volume of available money or credit that results in a general decline in prices reduced economic activity: the reduction of general economic activity, including lower prices and a reduced supply of money and credit de·fla·tion·ar·y mon·e·tar·y pol·i·cy noun monetary policy for demand reduction: a macroeconomic policy to reduce aggregate demand in an economy by adjusting interest rates and other monetary policies 2 : a contraction in the volume of available money or credit that results in a general decline in prices ---------------------------- I see what Reisman is saying: that if only prices fall, (while wages don't fall, profits don't fall, and companies can produce and sell more goods and services through higher productivity) then it's not deflation. But, under a gold standard, how does a government smooth out the economic cycle? I suppose they still could do deficit spending during recessions (and surplusses in good times, if they are responsible).

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