The essence of deflation is a decline in economic vitality, not simply a continuous decline in the prices of goods and services. How to judge the continued decline in economic activity is to understand the essence of deflation. between deflation and debt

The essence of deflation is a decline in economic vitality, not simply a continuous decline in the prices of goods and services. How to judge the continued decline in economic activity is to understand the essence of deflation. Deflation and debt seem to be inextricably linked. Fisher's theory of the deflation-debt cycle, although it was intended to explain the causes of the Great Depression in the United States, has gradually gained widespread attention and application.

The formation of deflation is not simply a change in prices and the economy, it is more reflected in the weakening of economic vitality. Deflation is different from the general price decline, it is more manifested in the weakening of the entire economic activity, and the change in economic activity is the real key to understanding deflation. It is the weakening of economic activity itself that brings about the decline in prices, not the other way around.

Deflation seems to be inextricably linked to debt. Fisher's theory of deflation-debt cycle, although proposed in response to the Great Depression in the United States, has received wider attention and application.