Real vs Money Incomes – the one thing we need to understand during deflationary times (with an illustration from Greece and Cyprus)

More devolution.

Yanis Varoufakis

deflation.jpgIn inflationary times, real income growth is always good news. However, in deflationary times, real income growth may well reflect a deepening recession (or even a depression). This is important to know lest deepening recession is presented as… economic recovery (as has been the EU’s wont in recent times).

How can real income growth reflect a deepening recession?

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