Why do most countries always aim for a slight inflation of their currency? What’s so wrong with deflation?

Question

The argument that I hear the most is that if money will increase in value then people are going to save as much as they can and spend far less, which will decrease economic growth. But wouldn’t it be far better if everyone only buys the things they really need and save the rest?

In: 1

Answer 1

Deflation means that the prices tomorrow are going to be cheaper tomorrow so people tend to wait and delay purchases till they are cheaper and the economy stalls as fewer people are buying things. https://youtu.be/-dnKdCwCw8o