Petah?

[u/Melodic_Judge_129]

[u/Gentle_Snail]

Deflation can also result in a very negative feedback loop, the Great Depression was a deflation spiral for example.

[u/Mayor_Death → u/Gentle_Snail]

Is deflation a cause or symptom, though? To me, it’s just a number, but I understand that it is more than that to various economic groups.

As far as I understand it, deflation indicates that prices are going down, which is a good thing to me individually.

[u/gicjos → u/Mayor_Death]

The prices only go down when people don't have enough money to buy things. For the prices to go down most people will be in a really bad situation 

[u/obeytheturtles → u/gicjos]

At a macro scale, the biggest benefit of some inflation is that it also devalues debt while it devalues currency. In a deflationary spiral, the real value with debt compounds with deflation in addition to interest, so the velocity of money grinds to a halt. No investment means no jobs, bread lines, and a complete collapse of the consumer economy, resulting in a corresponding collapse of the government's tax base. This is literally the entire basis of Keynesian economics - that the government must engage in deficit spending to combat deflationary pressures during recessions, because there is basically no other option.

[u/Fly_throwaway37 → u/obeytheturtles]

It's so enraging how difficult it is to explain the velocity of money concept to people.