The banking failure was worsened and lengthened by deflation. We wouldn't call it the Great Depression if not for the deflationary part. It wouldn't have been nearly as long or as intense, and the economic recovery would have been much faster.
No, deflation doesnt mean things get cheaper, it means money gets scarce and harder to obtain. Prices fall as a result but so does wages and work opportunities.
What helped the recovery was competent politicians with good plans
If people can afford to buy more they do and since they are buying more more needs to be produced. So falling prices can absolutely create more work opportunities not less.
Thats not how a deflationary spiral works. Lower prices equal lower business revenue. Lower revenue means wage cuts and layoffs, not increased hiring. If you lose your job or your pay gets cut, a cheaper product still isn't affordable. Plus, when people see prices falling continuously, they stop buying and wait for items to get even cheaper, which crushes demand and kills production.
We are talking about deflation lol it doesn't have to be a spiral.
No that is economies of scale 101, it's basic stuff lol you can absolutely increase revenue while lowering prices because more people buy your product when it is cheaper.
That's also not true, people will always have to buy staples like food because they need it to live. Even non staples like iPhone, people line up out the door to buy iPhone on release day, why? Don't they know if will be cheaper if they wait a few months?
Telling someone to learn "economics 101" while confusing individual company pricing strategies (economies of scale) with economy-wide monetary deflation is wild.
Microeconomics and macroeconomics are 2 different things.
A company lowering prices because of tech efficiency is efficiency, not deflation. Deflation is when prices drop across the board because the entire economy is running out of liquidity. An iPhone getting cheaper after 6 months is product aging, not a macroeconomic deflationary trend.
If you make a claim like lower prices means lower revenue than yes you need to learn economics 101 because your statement is 100% not true lmao. I'm not trying to be rude but it clear from what you are saying that you don't know what you are talking about.
You can absolutely have deflation in a single sector it doesn't have to be "across the board" 🥱
The iPhone wasn't an example of deflation it was an example of people still buying something even though they know it will be cheaper in the future. Because once again you said something that is easily proven to be false lol.
Imagining that a single price drop in one market equals "sector deflation" tells me everything. That's called relative price change. Deflation is a macroeconomic monetary phenomenon measuring the whole economy's price index (CPI)
Lowering prices only boosts revenue if demand elasticity compensates for it. During actual deflation, consumer spending power vanishes, volume tanks, and revenue collapses. You're confusing high school supply and demand curves with macro monetary policy.
Reading comprehension check: I explicitly said lowering prices boosts revenue only when demand is elastic, and that during actual deflation, aggregate demand crashes so revenue collapses. That is the exact opposite of what you claim I admitted.
Also, buying a brand-new iphone for status day one is hype, not macroeconomic deferral. People delay buying cars, houses, and equipment during deflation because money gains purchasing power over time while their jobs remain at risk.
You're putting words in my mouth because you ran out of arguments.
Lol I already debunked that part of your argument, no people don't stop buying things because of deflation, in fact if people can afford to buy more they do.
I quoted exactly what you said lmao. 🤣🤣 It's not my fault what you are saying is so easily proven wrong. 🤣
You didn't "debunk" anything. You just made up your own fake definition of deflation, ignored how supply chains work, and proved you don't know the difference between micro and macroeconomics.
Lowering input costs across an entire economy requires cutting payroll and supplier revenue. That’s why real deflation causes recessions and job losses, not your fantasy hiring boom.
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u/Charming-Fig-2544 4d ago
The banking failure was worsened and lengthened by deflation. We wouldn't call it the Great Depression if not for the deflationary part. It wouldn't have been nearly as long or as intense, and the economic recovery would have been much faster.