by Laura Conaway

We're going to be talking deflation on the podcast today, as in "How in the world could falling prices be so bad for you?"

Meanwhile, Jason writes:

I came across an old article that I thought might be useful for you.

It describes the economy of a WWII POW camp, and how a market quickly emerged for trading rations. Cigarettes became the currency, but the most useful thing is that while the camp economy basically had all the features of a huge international one, it was quite simple, with very few inputs, which makes it easy to understand. They went through periods of inflation and deflation, set up a basic futures market, etc.

 

Even though I knew what certain seemingly esoteric things like deflation or capital were in theory, this article gave me a much clearer sense of how they actually work at a fundamental and practical level.

The language is fairly academic, but I was thinking you might be able to adapt some of it to use in your explanations.