Filter by Categories
Accounting
Banking

Economics




Monetary Death Spiral


A situation that arises when a government continuously attempts through its policies (particularly monetary policies) to drive up economic growth by stimulating aggregate demand, even when it comes at the cost of increased levels of debts and shrinking private savings. The spiral reflects both failed attempts to do so, while the cost has already been incurred in vain. A monetary death spiral manifests very high inflation rates accompanied with a downward trajectory for interest rates, productivity and economic growth.

A monetary death spiral is usually instigated by a wave of bankruptcy and a weakening or deteriorating credit rating that seems to be driving an economy into a black hole. This trap is set up and re-enforced by meaningless debt accumulation (“borrowing from Peter to pay Paul.”- so to speak)

It is known for short as MDS.



ABC
This section covers a wide-ranging array of terms and concepts, among others, in the area of economics and broadly the economy, both ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*