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Did people borrow less from 1873 to 1896?

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No2statism posted on Sun, May 5 2013 6:57 PM

If the deflation didn't deter people from borrowing, then why didn't it?

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Verified by No2statism

Price deflation (currency appreciation) does not deter people from lending out money. It's better to have $10,000 + interest than just $10,000.

Price deflation does deter people from taking on loans, but that deterrence is effectively just depressed demand. Depressed demand for credit leads to lower prices (less interest) for the credit, making it more enticing to borrow.

Just my 2 cents. I don't have data on that time period. Sorry.

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