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Deflation means you can buy the same amount of goods (sustaining the same sized economy) with less money. That less money means you have more surplus money to
by MCRed 12y ago
Deflation means you can buy the same amount of goods (sustaining the same sized economy) with less money.
That less money means you have more surplus money to spend on luxuries. More people will have more disposable income, which likely would mean they buy more goods, and could sustain a larger economy... leading to economic growth.
Plus-- the goods you're buying are made by companies who are buying materials at a lower cost, and thus if they lower prices slower than the materials prices are going down due to inflation they have more margin.
Businesses as well will have more flexibility, the ones that are borderline now will last longer, might turn things around, etc.
- Nursie 12y agoYou're also getting paid less over time. Meanwhile my savings are slowly growing in economic power, even though all I've done is stuff them in an old mattress. New entrants to the labour market can never aspire to have the kind of cash their older peers have put away because work yesterday is valued more than work today. Not a world I want to live in.