Mild deflation is consistent with economic expansion, at least according to some models (see the von Mises Institute.)
After all, we have had deflation in electronic goods for at least 25 years and that hasn't hurt economic activity in those sectors.
Falling prices can actually stimulate buying. Store sales and common sense tell us that.
The problem is (either hyperinflation or) hyper deflation.
But prices that fall in an orderly fashion because we produce goods more and more efficiently and with more and more technological knowledge and better production methods can be consistent with an expanding economy.
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Don't conflate deflation and depression.
Nov 19 12:16 pm
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All Comments by carey_jim »7 Key Points About Deflation [View article]
Mild deflation is consistent with economic expansion, at least according to some models (see the von Mises Institute.)
After all, we have had deflation in electronic goods for at least 25 years and that hasn't hurt economic activity in those sectors.
Falling prices can actually stimulate buying. Store sales and common sense tell us that.
The problem is (either hyperinflation or) hyper deflation.
But prices that fall in an orderly fashion because we produce goods more and more efficiently and with more and more technological knowledge and better production methods can be consistent with an expanding economy.