It is not a fall in credit as such that is the key to deflation, but a fall specifically in credit created out of thin air. It is this type of credit that causes the decline in money supply, i.e., deflation. FULL ARTICLE by Frank Shostak
Source link: http://archive.mises.org/10932/does-a-fall-in-credit-lead-to-deflation/
Does a Fall in Credit Lead to Deflation?
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