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Sep 11, 2023 · Economics. Can Deflation Ever Be Good? By. Rakesh Sharma. Updated September 11, 2023. Reviewed by. Robert C. Kelly. Typically, deflation is a sign of a weakening economy. Economists fear...
Jan 17, 2024 · In an economy dominated by debt-fueled asset price bubbles, deflation can lead to a temporary financial crisis and a period of liquidation of speculative investment known as debt deflation.
Aug 12, 2023 · Decreasing prices of certain products, such as food or energy, is good for the economy because it positively impacts consumer spending. However, a widespread fall in prices signals weak...
This is a very good explanation, except for a minor correction on the last point: the inflation rate is traditionally set at 2% not to influence behavior, but to ensure that there is room for monetary policy to prevent a minor deflationary shock from sending the economy into a deflationary spiral.
Sep 21, 2023 · Most economists say that while disinflation — the fall of inflation toward some reasonable level such as Powell's two per cent target — is an unmitigated good, an actual decline in prices...
Essentials (food, fuel, etc) would be especially immune to the "wait for a cheaper price" mentality. Also, minimal deflation (< 2%) wouldn't impact the economy much. All that said, ideally there would be neither inflation nor deflation. Or as close to 0 as possible.
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Mar 12, 2024 · Core inflation — all prices minus volatile food and energy — rose even more, at 3.8%. It’s more proof that getting inflation down the rest of the way to the Federal Reserve’s 2% target is ...
