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I guess we are talking about different deflations. If the prices fall because economy crashed (e.g. due to an inflated credit bubble beforehand) and now everyo
by oleganza 6y ago
I guess we are talking about different deflations.
If the prices fall because economy crashed (e.g. due to an inflated credit bubble beforehand) and now everyone is without spare cash and broken/useless production chains, then sure - no one is buying stuff because life is miserable.
But if the prices fall because everyone's savings exist and appreciate, then arguably, people can afford more things tomorrow than yesterday, which could only cause them to spend and invest more.
Rising prices due to monetary inflation only "stimulate economy" (whatever it means) on a short distance while people have money to spend and are forced to get rid of it for something more useful. But that's not a sustainable game.