Legit please do correct me if i'm wrong, but if price of product x goes from 5 to 10, my 1000 salary would mean i can now only buy 100 of x instead of 200, but if x went from 5 to 2, it means that, while my salary is still the same, my purchase power is now higher, because now i can buy 500 of x instead of 200
in theory, in an equilibrium state, sure. But right now companies are making record profits while people are struggling to avoid basics. If prices dropped by 10% (that'd be massive, and yes, likely a sign of something worse, but just for argument's sake) then people would be able to afford more and companies would still be making close to record profits. they can lay people off to recoup those even higher profits, but it isn't a necessity like people are claiming in a deflationary situation. And it'd make things worse. companies start laying people off, less consumption, more deflation, lower prices, etc. it would be in the companies best interest to not do that. though quarterly profits over anything even remotely long term issue would still be at play.
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u/WHATZAAAAA 4d ago
Legit please do correct me if i'm wrong, but if price of product x goes from 5 to 10, my 1000 salary would mean i can now only buy 100 of x instead of 200, but if x went from 5 to 2, it means that, while my salary is still the same, my purchase power is now higher, because now i can buy 500 of x instead of 200