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Any evidence for your claim that deflation following a period of inflation has fewer (or none) of the harms associated with deflation? Any reason to believe th

Any evidence for your claim that deflation following a period of inflation has fewer (or none) of the harms associated with deflation? Any reason to believe that central bankers are in a good position to fine tune to get just the right amount of deflation and not overdo it, given that they already struggle with the same for inflation? Any reason to believe that the dynamics of a car diving in a line are comparable to the dynamics of the global economy? I don't understand the magical thinking often demonstrated in these threads. Just because it sounds plausible, that doesn't necessarily mean its true.

listenallyall 4y ago
If you're waiting for undisputable hard evidence of any macroeconomic theory, you'll be waiting a long time. The global economy is constantly changing and evolving and nations interact and trade in different ways over time. I have no faith in central banks to engineer a perfect landing, that's not the argument, it's simply that the concept of "deflation = bad" is not necessarily a universal truth.
- twixfel 4y ago
  So you have no evidence or reasoning whatsoever, just an analogy involving a car and vibes. That macroeconomics is difficult is no reason to just start doing random shit. I'm not asking for "indisputable hard evidence", but definitely something more than ~vibes~.
  - listenallyall 4y ago
    I just gave you the reasoning. Coming off a "normal" economic period, deflation might have the negative effects everyone is claiming. (Might. I'll leave all the evidence gathering to those claiming it's so awful). But we aren't in normal economic times. We're coming off (or, at 7+%, still experiencing) a period of ultra-high inflation (for the US) where prices seem to be rising out of control, where credit card debt is increasing rapidly. If prices were to fall, say 2% in 2023, I think that would be preferable for almost every consumer than prices continuing to rise even further. And the idea that the economy would grind to a halt and sink into recession as people delay purchases hoping for another 1% drop in prices, is pretty absurd.

listenallyall 4y ago

If you're waiting for undisputable hard evidence of any macroeconomic theory, you'll be waiting a long time. The global economy is constantly changing and evolving and nations interact and trade in different ways over time. I have no faith in central banks to engineer a perfect landing, that's not the argument, it's simply that the concept of "deflation = bad" is not necessarily a universal truth.

twixfel 4y ago
So you have no evidence or reasoning whatsoever, just an analogy involving a car and vibes. That macroeconomics is difficult is no reason to just start doing random shit. I'm not asking for "indisputable hard evidence", but definitely something more than ~vibes~.
- listenallyall 4y ago
  I just gave you the reasoning. Coming off a "normal" economic period, deflation might have the negative effects everyone is claiming. (Might. I'll leave all the evidence gathering to those claiming it's so awful). But we aren't in normal economic times. We're coming off (or, at 7+%, still experiencing) a period of ultra-high inflation (for the US) where prices seem to be rising out of control, where credit card debt is increasing rapidly. If prices were to fall, say 2% in 2023, I think that would be preferable for almost every consumer than prices continuing to rise even further. And the idea that the economy would grind to a halt and sink into recession as people delay purchases hoping for another 1% drop in prices, is pretty absurd.