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It only really causes a problem if you don't prepare your economy for it. Prices should really only drop for commodity products and basics, so that one can live
by mozumder 8y ago
It only really causes a problem if you don't prepare your economy for it. Prices should really only drop for commodity products and basics, so that one can live for $100/month. You should still offer incentives for people to spend more, such as offering higher end real-estate and products, or just bringing in more people into your economy.
- xapata 8y agoWhat mechanism causes this deflation for commodities and basics? How much of the economy is basics?
- mozumder 8y agoEfficiency and automation reduces commodity prices. Just transporting food is a huge cost. Get transport costs down and you reduce food costs.
- walshemj 8y agoI causes people to delay spending and horde rare goods (gold etc) it also has massive problems if say 90% of your populations mortgages are underwater see Japan