what is a debt deflation channel
Debt deflation is a theory of economic cycles that holds that recessions and depressions are due to the overall level of debt shrinking : the credit cycle is the cause of the economic cycle.The theory was developed by Irving Fisher following the Wall Street Crash of 1929 and the ensuing Great Depression.The debt deflation theory was familiar to John Maynard Keynes prior to Fisher's discussion of it, but he found it lacking in comparison to what would become his theory of liquidity ...