Deflation means that every single day your money is worth more, so for example
(Effectively)
Day 1: Eggs cost $12
Day 3: Eggs cost $10
Day 5: Eggs cost $8
So on and so forth, but for everything.
What happens is people start only buying what’s necessary immediately, because in a few days things will be even cheaper. It’s a constant spiral that’s really difficult to stop, because you either have to take a nuclear option and implement price floors, or figure out how to incentivize people to actually spend their money.
Maybe a bit of correction to our overconsumptive habits is called for. So many people trade in 1-2 year old cars just because they want the shiny new one. Maybe that needs to slow down.
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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?