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A counter-argument is that people invest in new enterprises even when the banking real interest rate is positive.
by BarkMore 15y ago
A counter-argument is that people invest in new enterprises even when the banking real interest rate is positive.
- sneak 15y agoTo paraphrase jwz (like that's never been done before), "When the rebuttal to your argument is 'The Industrial Revolution', generally that means that you've lost the argument." :)
- BarkMore 15y agoMy snark decoder is broken. Please explain the parent comment.
- alenlpeacock 15y agoDeflation doesn't remove all incentive to invest, but it does destroy the "gotta keep ahead of inflation" one. I meant to be more explicit about that when I said, "you could still try to invest some of it to try to outperform the gain you get from deflation."
- caf 15y agoAhh, but they only invest in new enterprises that they feel are likely to significantly out-perform the prevailing real interest rate (risk free rate of return). Significant deflation raises the bar, by putting a floor under the risk free rate of return.