[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

520 ∂ CHAPTER 23 THE COST OF LIVING AND INFLATION
nineteenth century, the concern was deflation, which is a steady decline in the price
level. Borrowers at that time who were in debt and had not anticipated the fall in prices
found that the dollars they had to pay back were worth far more than the dollars
they had borrowed. They were as upset about this as investors (lenders) are when
inflation makes the value of the dollars they get back from an investment or loan
worth less than the value of the dollars they originally put in.
During the past fifty years, however, inflation has been a major concern in the
United States. The 1970s are often referred to as the era of the Great Inflation, and
by 1980s, inflation had risen to more than 13 percent. Inflation fell during the 1980s,
and remained low and relatively stable throughout the rest of the twentieth century.
The possibility that the United States would experience deflation emerged as
a concern early in the twenty-first century, but this worry soon faded, and the United
States has continued to have low rates of inflation.