So to make it clearer, it's not that things will cost less thats the problem for small items like food. You will likely buy eggs regardless because food are essential items. We will always buy eggs regardless of the price. It's the larger items like houses, cars, tvs, etc. The big, expensive purchase that aren't necessarily required right away are put on hold, i.e. the non-essentials. This creates a downward spiral because companies start cutting costs more to clear inventory and make sales, thus reinforcing the waiting till it hits the bottom price before buying. And since they aren't making sales and generating revenue as high, they start down sizing employees to make up the loss. This means more people who now can't afford these items and have to wait on more essential products until they can hopefully find work.
Debts also don't shrink because of inflation. Your student loan payments, car payments, and/or house payments don't change. You'll still have to pay those in a period when people are losing jobs. Well now you're spending the money you saved on the non essential items on your debts while you're now job hunting in an economy where you have more and more people joining that hunt more often while companies are also freezing hiring or cutting wages to minimum to save costs, which means even if you have a job, you're making less and can't afford the reduced costs.
Now, this is for full economic decline. If individual sectors (for example smarthphones and computers) experience deflation because technological innovation or increasing efficiency, that can be good because incomes and productivity rise with it and the sector will experience a boom. For example when cars became easier and cheaper to make so more families could afford them, thus making the car market over all better.
I hope this helps explain better what you were asking.
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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?