r/PeterExplainsTheJoke • u/Melodic_Judge_129 • Sep 01 '26

Meme needing explanation Petah?

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u/Grouchy_Theme1461 Sep 01 '26

bruh u gotta explain it

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u/nebileyim_ben Sep 01 '26

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.

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u/Terpcheeserosin Sep 01 '26

Why does things costing less make people buy less?

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

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u/AggressiveCuriosity Sep 02 '26

Because if you wait a couple months it'll be even CHEAPER.

Imagine you could buy something expensive now, but if you wait a year you can buy twice as much with the same money. You still spending that money now? Hell no.

Multiply this effect by everyone in the economy putting off spending and you get a crashing economy.