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/biz/ - Business & Finance

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80325 No.80325[DELETED]  [Reply] [Original]

What is worse for the economy, inflation or deflation?

>> No.80389

Both is bad.

>> No.80387

if only there were some sort of data that we could consult

>> No.80401

Poor people

>> No.80394

Depends on the population growth in that economy

>> No.80465

Ideally you'd want a little bit of inflation to keep up with growth. However, living in a society with high inflation is a lot worse than living in a society with depression.

>> No.80482
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80482

>>80325
Deflation is better for people who save, inflation is better for people who are in debt. Our government is in eternal debt, therefore inflation is guaranteed.

>> No.80590

last time we had deflation going on, we called it the great depression

just fyi

>> No.80625

>>80325

the rich always prosper and the poor always suffer. the economic model doesn't matter.

>> No.82407

>>80590

That's putting the cart before the hose.

The depression caused deflation not the other way round.

Deflation was necessary so that stock and wages could reach their market clearing value. Unfortunately Hover and The Fed did every thing they could to keep prices and wages high thus extending the depression.

>> No.82476

>>82407
>I don't know what a depression is
lol

>> No.82503

but if things are deflated in value, doesnt that mean your dollar goes further?

>> No.82533

>>80625
The rich suffer a lot more, at least in the short term, with inflation. Which is why it's probably so demonized in the mainstream. Deflation is worse all around though because it naturally accelerates itself and destroys the the economy as a whole.

>> No.82554

>>82503

It means your dollar is worth less. Since most of our shit is not made in America anymore, your dollar does not in fact go as far under deflation.

>> No.82602

Deflation kills the economy because people sit on their money since things will always be cheaper "later." Inflation is natural, though hyperinflation will of course be bad. Ideally, I think you should want some minor inflation.

>> No.82663

>>82503
Yeah but you lose your job, and everything is closing
Stable inflation is good for the economy.
If theres wasn't inflation, why invest? why try to optimize your business.
Deflation must be avoided at all cost.
Read "This time is different"

>> No.82689

inflation

deflation is great. Don't we all wait to buy a computer so prices for the new stuff go down?

>> No.82702

>>82602
>people sit on their money since things will always be cheaper "later."

they can't sit on it forever. And low prices for consumers is a good thing. Consumers can buy more with less.

>> No.82746

>>80325
I'd say it depends on the current state of the economy. For instance the Euro zone would be much better off with inflation

>> No.82769

>>80625
>the poor always suffer
>If you wanted the same tech an iPhone has in 1991 it would cost you over 3 million dollars
I'd say the poor's lives have been improving

>> No.82827

>>82702
>buys more with less
sounds like a total nightmare for business, whose employee wages are locked via contract and now cost of goods go up

>> No.83957

>>82769
an iPhone is not a necessity

>> No.83973

>>83957
Something like it is.

>> No.84011
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84011

>>80625

Right. We should institute an economic policy that makes every equally impoverished because my feelings tell me know one should be rich

>> No.84042

stagflation

>stagnation and inflation

>> No.84359

>>82407
Why would deflation be necessary for wages to reach their market clearing value?

>> No.84392

>>84011
>average per capita income of 1200 AD

Yeah I'm sure this is based on reliable data

>> No.84412

>>80325
>implying the entire economy can be aggregated and treated as a singular entity
lol

>> No.84462

>>80325
Deflation obviously. Discourages expenditure, which in turn fucks up productivity, which in turn fucks up investment. Banks hoard, people hoard, government gets blamed.

Just look at Japan.

>> No.84496

>>84462
The Japanese lost decade was caused by factors not including deflation.

>> No.88084

>>84359
not the same guy but surely there would be a massive drop in demand after a depression and there workers would need to take large pay cuts to sustain the same the level of unemployment.

>> No.88090

>>88084
*employment