> You're asking how hoarding cash instead of paying higher wages causes wage deflation? No, I'm asking how deflation in general causes wage deflation. Your pos

> You're asking how hoarding cash instead of paying higher wages causes wage deflation? No, I'm asking how deflation in general causes wage deflation. Your post was in answer to deflation caused by hiding/destroying cash. > Wage deflation relative to CPI. Wages remain stagnant or increase less than prices. So it's not related to the increase of value in the currency caused by hiding away 1 billion under a mattress. You used the same term but for different context/meaning. The weird thing is how you phrased it as if it was a causal relationship. > Deflation was a primary cause of the Great Depression. Deflation is very bad. There's many factors for the US Great Depression (such as previous inflation). There's also the relative speed at which those things occur. Both can be destabilizing in high enough magnitude. But deflation is the natural result of a growing economy and better efficiency. If it was bad, civilisations would have self-destructed every time they came up with a better way to do things. Imagine a new technique that would reduce food prices by 50%. Would this be a good, or a bad thing? > inflation doesn't eat the value of stuff. If you own a home or stocks then inflation causes their value to increase proportionally. Sure, I never said to the contrary. What's your point? People should stop saving money and buy everything around them instead? There's a huge cost to that, especially in real estate.