(I’m American) Inflation is the rising cost of goods and services. Inflation constantly goes up by varying degrees. When economists say “inflation is decreasing”, that just means that the rate of inflation has slowed, not that inflation reversed.
If inflation is causing money to be less valuable over time, why would it be bad to have deflation? Would that not make my money more valuable? I’ve been told it would be very bad, but not in a way that I understand
In: Economics
It isn’t. In fact, we’re overdue for and need an asset crash if we want housing and cars to be affordable again. The examples given in this thread assume extreme deflation. Yes, if something is going to cost 10% less every day, then I’ll keep putting it off. That’s just as bad as 10% a day inflation forcing me to spend everything i can immediately. However, as a real world example, tech prices fall rapidly regularly, yet people still line up to buy the new iPhone and Galaxy phones the day they come out, and Apple and Samsung are still 2 of the largest companies in the world. It doesn’t stop their investment either.
No one is putting off buying food because it’ll cost 2% less next year. Same with gas, shelter, transportation to and from work, etc…
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