Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?
Why buy x thing at $10 when you can wait till next year and get it at $9.50? But applied to companies so the effect is fucking huge and people hoard wealth even more than they do right now instead of spending it which is basically a requirement for the economy to function properly.
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u/StuartMcNight 8h ago
Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?