4 ms·
Prices drop and people spend less? That's silly.
by rhyme-boss 3y ago
Prices drop and people spend less? That's silly.
- deleted 3y ago[deleted]
- xwdv 3y agoIt’s not silly. If you know prices are only going down you might hold off on buying that house or car until later because you know you’ll just get it cheaper.
- cjbgkagh 3y agoDepends if you need a house or not, the idea that people are treating future consumption as an investment does not seem to hold much weight. In a competitive market others will be making a similar gamble meaning rents will be higher than normal due to increased demand, and the market will normalize.
- nvalis 3y agoIt's more people see prices dropping hence their money increase in relative value so they save up more instead of spending it.
- rhyme-boss 3y agoIt just reminds me how unserious economic theory is. You can tell any kind of story you want.
- ferdowsi 3y agoSo silly that it's exactly what happened during the Great Depression.
- nostromo 3y agoContext matters. Prices dropped because people had less money. They didn’t drop because people were sitting on piles of cash hoping for cheaper prices next year.