Comment on [deleted]
daniskarma@lemmy.dbzer0.com 18 hours agoIf not so much about holding purchases. Is about money sitting. With deflation your money is worth more each day. So investment is discouraged. Why risk money if money by itself grow?
In a economy based on investments that not desired
toastmeister@lemmy.ca 18 hours ago
I think its because deflation is when the money supply is contracting, so asset values begin to be valued at their actual value instead of their inflated nominal value. Which an inflated nominal value causes more consumption via the wealth effect, and the misallocation known as the business cycle.