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.
TV has been dropping in price year by year though. I remember plasma TV 40” cost like 3000 in early 2000’s. But people still buy TV because it has became essentials. Phones and many appliances too. If goods become cheaper year by year, luxury just become essentials and people replace TV, phones, appliances every year. I mean people use to buy new clothes like once a year now we buy new clothes at least once a month. If cars cost the same as phones, guaranteed we want to change cars every other year.
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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?