Debt deflation

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Debt deflation. 1 connected concept: Minsky moment (related to).

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Community · Minsky moment

Summary

Debt deflation is a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages.

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Consequence of the collapse
Irving Fisher's theory of debt deflation describes the process that often follows a Minsky moment, where the attempt to pay down debt causes a further decline in prices.
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