The economic tool would be to pay people fair wages in the first place. Theoretically, according to the people who control the economy, increasing wages is what causes inflation, right? So if you increase wages, that should cause inflation, which would curb deflation, right?
in a deflationary situation consumption would be low so companies wouldnt have revenue to increase wages.
also increasing wages increasing spending and thus inflation when we already have inflation, becuase there no use keeping your money safe since it'll jsut lose value
the problem with being in deflation is that its a pit thats hard to out of. even if you give people more money, they will hoard it because the money will increase in value over time but things they buy wont. consumption will be restricted to neccesities
the reason we need some inflation is so the money loses value faster than things so people buy things which moves money around faster so people have more mobility and flexibility and mobility in creating value. deflation stops the money cycle dead and starting up from cold again is hard
That would be one way, but the problem is that it can't be done centraly in reliable fashion. One way to do it would be goverment giving instant pay raise to all goverment employees (with printed money) and hope that it alone will uptick spending and make private sector follow suit.
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u/rocinante1882 7h ago
The economic tool would be to pay people fair wages in the first place. Theoretically, according to the people who control the economy, increasing wages is what causes inflation, right? So if you increase wages, that should cause inflation, which would curb deflation, right?