[–] ForTheUltimate ago (edited ago)
because it stunts hiring (especially in the presence of minimum wage laws) and it stunts risky investments (like research and development, prospecting, etc.).
freeing up ressources for other consumption and investment. By no longer bidding up prices of factors, other users have increased supply available to them.
Deflation is also particularly bad for people that have debt, like student loans or mortgages, at it increases the real value of debt over time.
What an opportunity to have less of a debt based economy!
thanks but I'm already quaint with the mainstream.
[–] CanIHazPhD 1 point -1 points 0 points (+0|-1) ago (edited ago)
freeing up ressources for other consumption and investment. By no longer bidding up prices of factors, other users have increased supply available to them.
Completely the opposite, you reduce hiring and r&d and supply immediately follows the downward spiral. There is a reason recession in most if not all cases follows and accompanies deflation.
What an opportunity to have less of a debt based economy!
Debt is not a bad thing, it's abuse is the problem. Most investment and growth opportunity has a time window, borrowing money lets you (or companies) make those windows.
thanks but I'm already quaint with the mainstream.
Enjoy your enlightenment, and your not-understanding economics.
[–] ForTheUltimate ago (edited ago)
You completely missed the point. You need to breakdown the elements into more detail. but go ahead retard. You failed at intermediate micro-economics. you confuse the change in demand for something with the supply of money as one thing. Then you confuse money with real things. all that because your simpleton brain can't deal with more variables. or rather because you lack the morality and curiosity to find the truth.
[–] ForTheUltimate ago
I would also add that growth has been slow under inflation, so I would encourage you to activate your curiosity.
I would also add that prices will adjust to the new lower supply schedules of money under deflation and the market will clear. We already have 100 years of a huge economy of a precedent on this. kek
[–] CanIHazPhD ago
The 100 years of growth with deflation was for an economy based on natural resource exploitation, which is already a thing of the past. It was basically people picking the low hanging fruit, which was plentiful and widespread (agriculture in new lands, cash crops, logging, minerals, oil, etc.), that can't be done again.
If you look at countries that are not resource rich (Japan, South Korea, even India in recent years) you'll see that healthy economies always operate with low, but positive inflation rates. If you look elsewhere you'll see that countries in deflation always end in recession or other troubles due to deflationary spirals (look it up in the previous reference, unless that's too mainstream too)
[–] ForTheUltimate ago (edited ago)
causally explained by a central bank. not the rest of the economy.
1920 crash, stocks fell by more than in 1929. It's not an endless spiral because of the same reasons you fail to grasp. Deflation only ends in recession briefly to liquidate misallocations from the inflationary policies of your kind. Maybe the fed did something there. but I bet there are recessions that recovered absent any inflationary policy of your kind, thus disproving your ''death spiral'' theory. There is a spiral but it has an end.