alt Hacker NewsDeflation is about all prices going down. Just a few decreasing is normal.
Anyway, WTF, economics communication has a huge problem. I've seen the article's explanation repeated in plenty of places, it's completely wrong and borderline nonsense.
The reason deflation is bad is not because it makes people postpone buying things. It's because some prices, like salaries or rent just refuse to go down. That causes rationing of those things.
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Rent and salaries don't like going down because of debt. Debts are denominated in currency units and go up with inflation (interest rates have a component to correct for inflation) but they don't decrease if the currency gains value over time (this would need negative interest rates). I suppose that's something that could be done with regulation.
I agree. It's super common that the price of vegetables goes up and down arround the year, in particular due to the harvest season.
>It's because some prices, like salaries or rent just refuse to go down.
a common argument, but one that doesn't bear out in the absence of regulation enforcing that.
See "price stickiness" and what is simplified as "menu reprinting costs"; there's usually a cost associated with changing prices, and a cost associated with renegotiating prices for everything that's not being sold on a spot market. People cannot buy housing at spot, and while spot-labour pricing is definitely a thing for some services it's so socially destabilizing for anything skilled that most workforces operate on salary.
The reverse of this is that high inflation tends to cause a lot of strikes, because salaries refuse to go up and very high levels of inflation need salary repricing every month or even week.