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It doesn't really cause problems. Academic economists claim deflation is destructive, but it's a misanalysis caused by extrapolating from a tiny number of sampl
by nvm0n2 3y ago
It doesn't really cause problems. Academic economists claim deflation is destructive, but it's a misanalysis caused by extrapolating from a tiny number of samples and ignoring all the counter evidence.
If you have a fixed monetary base and the economy grows, all that happens is that things get cheaper, which is what you'd intuitively expect if a society gets wealthier. Economists claim that this will trigger hoarding cycles but this is a strange almost pseudo-psychological claim. It doesn't happen in reality, where there are many examples of prices falling continuously over time in a sector without it causing recession within that sector.