Petah?

[u/Melodic_Judge_129]

[u/Grouchy_Theme1461]

bruh u gotta explain it

[u/nebileyim_ben → u/Grouchy_Theme1461]

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.

[u/Terpcheeserosin → u/nebileyim_ben]

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

[u/Griffolion → u/Terpcheeserosin]

Things cost less to account for a fall in demand. Companies having to lower costs make less profit, and will then start considering scaling back their operations to survive. That includes layoffs. Layoffs means fewer people earning money, fewer people able to buy things, demand falls, prices go even lower, repeat.

Both inflationary and deflationary spirals are deadly.