How much do you know about inflation and deflation?
Generally speaking, "inflation" is the depreciation of our money, while "deflation" is the appreciation of money. The metric we usually measure is called CPI. It is to measure the price trend of the goods we usually buy.
For example, in Zimbabwe, the annualized inflation rate reached 130%, and the central bank "violently" raised interest rates to 200%, which is an absolute disaster for the local economy.
Japan is also a typical example, after the bubble burst in the 90s, it fell into "deflation", no matter how much consumption was stimulated, people just didn't spend money.
Whether it is inflation or deflation, it is bad news for the economy. For example, developed countries such as Europe and the United States will set inflation targets at about 3%. In general, economic growth and inflation are mutual. For example, in a normal economy, an additional demand is added. At a specific time, everyone goes to buy fried chicken together, which will lead to two results, one is to fry more chicken, and the other is to increase the price. When fried chicken shops make money, they buy other goods, thus forming an economic cycle.
However, the side effect here is price increases, that is, inflation. So demand drives economic growth, but also inflation. If the government wants to stimulate the economy, it will start with aggregate demand. Generally, to stimulate consumption, the government engages in subsidies. Of course, the common method used in European and American countries is to send money directly.
For example, the government issued a trillion to stimulate everyone to buy fried chicken, originally the people in this fried chicken shop were idle, and customers came to do it directly, so it was easy to meet the demand, so there was no need to increase the price. Conversely, this fried chicken shop is overcrowded, and if it stimulates demand, it will cause price increases and form "inflation".
However, appropriate inflation is a normal phenomenon for the economy, and we can generally feel it in our lives. As long as it's not hyperinflation or deflation, it's not a big deal.