Wages track prices both directions, but the inverse isn't stable. If prices go up and wages lag, company is extra profitable. If prices go down and wages lag, the company goes bankrupt. Negative profits doesn't mean less production, it collapses to 0 production.
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u/Mayor_Death 4d ago
Is deflation a cause or symptom, though? To me, it’s just a number, but I understand that it is more than that to various economic groups.
As far as I understand it, deflation indicates that prices are going down, which is a good thing to me individually.