4 ms·

Krugman wrote a good article earlier this week addressing why deflation is a bad thing. http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation-bad/ http:

• bfung 16y ago
  Plus the title of this post takes a naive twist to this topic. It's not the current prices that makes deflation bad for an economy, but that the (perceived?) future price will be even lower than the current price, which discourages investment since the investment will just lose. As for the comment about computer hardware (and this applies to cars), the opportunity cost of using the physical good now vs later is a bit more concrete than throwing money in a "business", esp. startups, which are by nature extremely risky.