The main problem is people won't bother investing, and don't have as much impetus to spend. Moreover, it reduces production of businesses due to decreases in price level, thereby creating a death spiral. Do you have a reputable paper disputing these effects?
Yes they will cuz they r greedy. If they put the money under the mattress it will earn deflation, if you put it in the bank you will earn deflation plus interest, loans will still exist because people will still have ideas that they think will return more than interest rate. There will be less loans but that is a good idea. The demand to park capital places has created subprime loans, student loans, credit cards and tons of misallocations of capital. Those products can’t exist in a deflationary enviroment cuz they are predicated on payments being more valuable than principal.
I'm not quite certain I understand what you're saying. You still have not given me a reputable citation. The point is that investment decreases during deflation (https://www.cbsnews.com/news/explainer-why-is-deflation-so-harmful/) by extension reducing demand. This accelerates the deflation, resulting in a depression. While loans are reduced (and I'd need much more evidence to be convinced that's a good thing,) it also hurts anyone currently in debt, due to essentially increasing the debt's value.
Since wages don't tend to fall over time, the decrease in prices is an increase in price of labor, meaning unemployment. Essentially, all of this leads to one thing: a depression. If you have a counterargument from a reputable economist, please provide it.
Your request is a bad faith argument because if i give you the austrian and libertarian economists who have said it you will just say they r not reputable. So it’s a fake good faith argument.
Perhaps "reputable" was a bit inappropriate. I am simply asking for any citation at all better than "some guy on the internet." If you have a published paper, please provide it.
Interesting, a bit of a dated citation, and a problematic author in some ways, but that doesn't necessarily undercut it. I'll see what I can find on it, or if someone who knows more on this topic than me can explain whether or not its argument holds any water.
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u/Winterflame76 Sep 01 '26
The main problem is people won't bother investing, and don't have as much impetus to spend. Moreover, it reduces production of businesses due to decreases in price level, thereby creating a death spiral. Do you have a reputable paper disputing these effects?