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?
All of your investments get wiped out and the economy crashes. Market crashes are strongly linked to deflation and it is likely the market you see falling out when you see signs of deflation on the horizon.
People do not lower prices for fun. They do it because the economy has tanked.
Everyone else is trying way too hard to explain something that is rather simple.
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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?