now i recently interviewed george celdran professor of economics at the university of georgia and a senior fellow at the cato institute and i asked him what his thoughts were on the inflexibility of the gulf standard specifically in relation to its contribution to debt deflation of the one nine hundred thirty s. here's what he had to say. that is a very oversimplified perspective on what happened in the thirty's to put it mildly the true story is far more complicated the old gold standard which was in place in the decades prior to the outbreak of world war two the classical gold standard didn't create deflation problems although there were of course debtors who wish there had been more inflation than there actually was under that regime they always do it doesn't follow that the regime actually created a non healthy rate of deflation for the most part it didn't now with world war one basically the old classical gold standard broke down and after the war there were attempts to cobble it together that invoked some let's say short cuts being implemented or special arrangements being made to tr

but the deflation question is being asked again now our next guest george celdran a professor of economics at the university of georgia and a leading scholar in the field of monetary and banking theory he came on the show earlier and i asked him whether he thinks like many mainstream economists that deflation is really a bad thing almost worse than inflation here's what he had to say. well that is exactly what most mainstream economists believe my view is that deflation be a very in their cases what it was but it's a mistake to assume that deflation is always a bad thing because there. is in history at least when it's been a perfectly fine thing if we had more often the good current we don't board a lot of trouble so in your vision in your opinion is there good inflation and bad inflation basically a deflation that weakens consumer demand versus one that just gives consumers lower prices. absolutely yes and you've summed it up pretty pretty well i wish other economists could grasp the difference is it as readily as you do the bad kind of deflation which the most atory accept the sort of which was in the early thirties