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Ireland's Deflation

Day 461, 12:32 • Published in Ireland Ireland

• by Michael Holcomb

To anyone who has examined Irish economic data lately it can be seen that the inflation level in Ireland is -42.11%, negative inflation, more commonly known as deflation. As prices have fallen, the real value of money in Ireland has risen, and according to eRepublik data that value has risen by over forty percent. What does this mean? In Ireland, if you save money you will come out ahead and if you buy only what you need when you need it, you will make gains as prices continue to fall.

However, the effect this will have on the economy is unclear. Because there is no banking system in eRepublik, there can be no interest rates. So with time this trend will not continue, though the government can't fight it by cutting interest rates, with time demand will increase and the market will react, causing a rise in prices. So what can you do to benefit from this? Save marginal amounts of money, and stay with your current job. The trend should, and likely will, reverse with time. But for now, while unemployment remains, or at least appears to remain, the Irish can only benefit for the time being.

Comments

enoofu Day 461, 13:21

This is happening cause lots immigrants are entering into the nation, which are using the euro.

Gary Kelly Day 461, 13:29

your smart enoofu

enoofu Day 461, 13:31

I would be worried cause we need to find a way to support all of these citizens before they flee and create a stock crash.

Michael Holcomb Day 461, 16:15

@enoofu: It actually comes as a result of increased liquidity because of rising profits. Not necessarily as a result of immigration, which would actually lead to inflation as a result of fairly stable salaries coupled with rising prices as the market adjusted to the larger population without the necessary increase in production. Something that would only come with time. Additionally, Ireland uses the Irish Pound, initials IEP. There's no single currency in eRepublik.