How does deflation increase the real cost of debt as described in Economist magazine?

charolastras2 asked:


It is a scenario theorized by the economist Irving Fisher. I don’t understand how deflation “increases the real cost of debt.” Can someone please explain?

Neil

Tags: Cost Of Debt, Economist Magazine, Irving Fisher

This entry was posted on Wednesday, March 4th, 2009 at 5:10 am and is filed under Debt Relief. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

One Response to “How does deflation increase the real cost of debt as described in Economist magazine?”

1. coryfucius Says:
   March 4th, 2009 at 6:51 am

   Danielle

   You would be repaying your debt with currency that has greater purchasing power than it did when you originally borrowed the money.