The Free Market Center

The Free Market Center

Inflation—Deflation

Deflationary Surge - Shoe Production Decreases

(Money Supply Decreases for a Period)

Shoe Production Decreases

Shoe Production Decreases -2.00%/Month
Wheat Production Fixed 0.00%/Month

Money Supply Decreases
from month 20 through month 30

 -2.00%/Month

Now, shoe production declines steadily. Money surges down during months 20 through 30.

Inflation-Deflation

In this case the decline in money counteracts the natural tendency for rising prices.

Direct Exchange

Inflation-Deflation

Same direct exchange pattern from declining production.

You see how changes in money have a countervailing influence on the trend of dollar prices set in motion by production and sales.

So, we'll summarize the section on Monetary Surges.

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& James B. Berger. All rights reserved.
To contact Jim Berger, e-mail:

© 2010—2020 The Free Market Center & James B. Berger. All rights reserved.
To contact Jim Berger, e-mail: