What is the difference between economic deflation and a depression and where is the United States Economy going? Professor Richard Wolff joins Thom Hartmann to discuss the difference between deflation and a depression.
A deflation is the opposite of an inflation. There is a general decline in prices, usually together with wages and salaries also going down.
There is no necessity that a depression goes together with a deflation. It can happen together if people in town don't have enough money to go to the store, and so the storekeepers become desperate that they're never going to move stuff off the shelf, so, to keep business going, they begin to drop prices. Then, you have this back and forth between falling prices and falling wages, kind of causing each other.