5 ms·

Deflation seems like such an impossibility, it’s hard to see how the genie goes back in the bottle here.

• R0b0t1 5y ago
  To wit, inflation only briefly dipped below 0 once, in '08, at -0.38%, possibly a rounding error. The value of money only goes down.
  • WalterBright 5y ago
    Deflation happened often in the US during the gold standard years.
    • WalterBright 5y ago
      It's not a matter of opinion, it's factual.
    • R0b0t1 5y ago
      We are no longer on the gold standard and have not been for ages.
      • WalterBright 5y ago
        I didn't know that, thanks for letting me know.
• scsilver 5y ago
  By the next generation moving and staying in cities rather than sprawling suburbs. It concentrates public resources and hugely reduces transportation costs. Combined with most services like medicine, finance, and education, getting remottified and automated, deflation is possible. I think ownership is going to get really expensive, we can't have abandoned building hogging space.
• WalterBright 5y ago
  Deflation happens when you're on the gold standard, and the supply of gold isn't keeping up with demand.
  • oarabbus_ 5y ago
    Deflation occurs on the supply-side when spending/credit/lending decreases significantly, it doesn't need to have anything to do with the gold standard. We had CPI-measured deflation as recently as May 2020, were we on the gold standard then? Or were there velocity of money explanation for the deflationary activity?
    • WalterBright 5y ago
      I'd be surprised if the CPI accurately measured inflation. Economies are chaotic systems, but the long term trends are predictable.
      • dwohnitmok 5y ago
        > Economies are chaotic systems, but the long term trends are predictable. A nitpick: these are contradictions in terms. Chaotic systems are precisely those systems which are not predictable in the long run. Perhaps you mean stochastic?
        • WalterBright 5y ago
          You are pedantically correct. But it's like the weather. We can predict long term climate reasonably accurately, but we can't predict next week's weather.
          • dwohnitmok 5y ago
            I was pedantic earlier, but this is wrong in a more profound way: > But it's like the weather. We can predict long term climate reasonably accurately, but we can't predict next week's weather. No we can predict medium term (decades) climate reasonably but over even longer timescales even general predictions about climate can break down (centuries or millennia), as is the nature of chaotic systems. This is true as well of economic "laws" and why I agree that economics is chaotic. Those laws that hold at the millisecond level are different than those that hold at the second level, which are in turn different on the time scale of years, which are different from those of decades, and in turn centuries and millennia. There are general patterns whose efficacy and predictive ability are more resilient than the rest but those too are eventually worn down by the relentless march of chaos.
• bruce511 5y ago
  The opposite of inflation is not deflation, it is stability (ie the lack of inflation). Deflation is much worse than inflation, and quite difficult to actually make happen, so you don't need to worry about that. In fact even steady, regular, inflation is not bad, but employers just need to understand the need for inflation based increases for all staff every year. Employers in the US are not used to that, and have been generally slow to keep up, but will eventually figure it out. And yes, there won't be the same number for all, so expect plenty of cherry-picking example articles for years to come. And generally workers (and customers) will be losers, because, well Capitalism. In most countries there is stable, regular, inflation and somehow they cope. The US has some catching up to do, but they'll figure it out. Albeit that the impacts of naked capitalism will be more pronounced there.