Depreciation (Monetary)

Depreciation (Monetary)

Summary of Depreciation (Monetary)

A fall in the value of money. This fall may be reflected as (1) internal depreciation, a decline in the domestic buying power of money, as measured by standard indices— if it now costs $110 to buy what $100 would have bought a year ago, the dollar has depreciated by 9 percent (100 divided by 110) during that period— or (2) external depreciation, the decline of a nation's currency measured in terms of another currency.

(Main Author: William J. Miller)


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