If people were willing and able to defer consumption to when things got cheaper, nobody would have bought any electronics for the last 70 years and nobody would ever have high interest consumer debt
It's a myth that deflation causes material drops in consumer spending. The inverse is what's true: drops in consumer spending cause deflation, as producers are forced to lower prices to move inventory that people stopped buying
Usually a drop in disposable or discretionary income. Sometimes an increase in the real interest rate
Another cause could be perceived economic instability, so people try to save more
Another cause could be markets behaving comparatively less efficiently, causing people to engage in less market labour and more domestic labour (i.e. instead of working more at a job and spending money on prepared meals, they spend less on groceries and cook for themselves; or instead of working more at a job and spending money on daycare, they look after the kids at home).
119
u/Terpcheeserosin 8h ago
Why does things costing less make people buy less?
If wages stay the same, shouldnt people just buy the dip?