stability and inflation
What happens if a self-organized system cannot grow? Is growth arrest a source of aging and death for networks? Is growth arrest a serious form of stress which leads to a series of topological phase transitions of the network, resulting finally in the disintegration of the net and death? Are we sentenced to grow in running away from our own death?
- Peter Csermely - Weak Links (Page 99)
Zero growth is an obviously unstable state, but non-zero growth is not necessarily healthy neither. Economic, physical and psychological systems thrive on small and positive inflationary coefficients.
Negative interest rates lead to deflationary dynamics that bring trade to a halt. Everyone delays their purchasing decisions and waits for prices to fall even further. Central bank sits still as well since it does not have any instruments for lowering negative interest rates even further. High interest rates on the other hand are also destabilising. Inflation gets out of control and cost of capital concerns cause companies to stop investing.
A deflating universe collapses to a singularity in a run-away fashion. Too much inflation on the other hand pulls space-time apart so quickly that matter gets too dispersed and planets (and therefore life-forms) can no longer emerge.
A deflating ego leads to depression. An overly optimistic view of oneself on the other hand leads to delusion. You need to fake it until you make it but also not lose touch with the reality by maintaining what psychologists call an illusion of objectivity.
