Wednesday, June 24, 2009

#really? 24. Coping with deflation

"While the experience of the nineteenth century proves that long-term growth can proceed apace even while deflation raises the value of money, business and investment strategies must be adjusted to the unfamiliar realities of deflation – that is, debt should be avoided; savings and cost reductions should be pursued with greater urgency; long-term contracts and compensation packages should probably be drawn with flexible nominal terms."

This is another of the controversial implications from The Sovereign Individual: Mastering the Transition to the Information Age by James Dale Davidson & Lord William Rees-Mogg, Simon & Schuster, 1997

Is it really so?

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