r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/Grouchy_Theme1461 9h ago

bruh u gotta explain it

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u/nebileyim_ben 9h ago

its deflation, prices keep falling over time.

japan experienced long periods of deflation which is hurt spending and as a result affected economic growth.

its super hard to fix that bcs of liquidity trap.

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u/Terpcheeserosin 8h ago

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

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u/dadofwar93 8h ago

More supply than demand. Usually happens when cost of production keeps dropping, as a result the compilation drives the prices down, supply increases, but the demand isn't going to increase over night.

More supply than demand causes further decline in prices. It spirals into economic collapse. Businesses start paying low wages or layoffs. Cause further reduction in demand.

Investors won't invest cause of uncertain market and economic conditions. More issues.