3 ms·
It is a bit hard to follow why a single digit percent drop in food prices would be a bigger economic problem. I can follow that falling house prices can create
by throwaway4good 3y ago
It is a bit hard to follow why a single digit percent drop in food prices would be a bigger economic problem.
I can follow that falling house prices can create a spiral where people defer purchases - but no one is going to defer buying a fried rice because it will be 5% cheaper next year.
But this - falling prices on daily necessities - sounds like more of a positive.
- zamadatix 3y agoI guess it would depend on the cause for the price drops since there could be many reasons for them. If it were because of an increase of efficiency then it would be a good thing, more things being made for less increasing supply causing them to be cheaper at a given demand is a good form of growth. The article mentions the drops are coming from a decrease in demand though, not an increase in supply. This kind of thing could conceivably lead to a spiral of lower demand -> cheaper prices -> less production -> less money flow -> lower demand -> ... under certain conditions. I'm no economics major though, so more educated interpretations of why it could be bad are appreciated.
- seanmcdirmid 3y agoPretty sure the pork slump is simply due to oversupply. Pig farming is mostly feast or famine, and last year's shortage is this year's surplus (price signals to fully grown pig time is incredibly laggy).