r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/Grouchy_Theme1461 9h ago

bruh u gotta explain it

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u/nebileyim_ben 9h ago

its deflation, prices keep falling over time.

japan experienced long periods of deflation which is hurt spending and as a result affected economic growth.

its super hard to fix that bcs of liquidity trap.

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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?

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u/Rienen97 4h ago

Short version, say you're selling your house but the market prices for houses goes down. Sounds great for potential buyers, right? Would increase the number? But what if this results in more people out of a job so they can't afford even the lower price? Then the next month, it continues to drop? Now you have people who COULD afford your house, but why would they? Next month it might be lower, which causes people to hold off buying. Why buy if it's just going to lose value?