Which is better: inflation or deflation?

Inflation is better than deflation. Deflation completely ruins the economy, whereas moderate levels of inflation helps in the growth of the economy, it leads to more investments, production and employment. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

Deflation on the other hand, leads to loss of production, investments, and leads to unemployment.

Further readings:

  1. RBI – Know About Reserve Bank of India, Functions, Composition
  2. Monetary Policy Committee (MPC) – An Overview, Instruments of Monetary Policy

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