The concept of inflation and deflation: which is worse for the economy?

The article examines two key economic phenomena - inflation and deflation, and also analyzes their causes, types and consequences for economic stability. Inflation is defined as a persistent increase in prices that reduces the purchasing power of money. Deflation, on the other hand, is a decrease in the general price level, which, although it increases the purchasing power of money, can lead to negative consequences such as economic stagnation and increased unemployment. The article also discusses in detail the main causes of inflation and deflation. The article concludes by comparing the economic impacts of inflation and deflation, emphasizing that each presents unique issues and challenges. Inflation can lead to loss of purchasing power, uncertainty, income redistribution and reduced competitiveness. Deflation can contribute to the emergence of a debt trap, a reduction in production and investment costs, and increased economic stagnation. The author comes to the conclusion that both phenomena require a careful approach on the part of decision makers in the field of economic policy in order to minimize their negative impact on the economy.