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LyingCaterpillar t1_jeetwlb wrote

Reply to comment by EinFahrrad in Eurozone inflation falls sharply as energy prices drop by misana123

Yeah I’ll believe it when I see it. I’ve never seen grocery prices drop.

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Objective-Sugar1047 t1_jeexw01 wrote

That’s a huge misunderstanding on your part. Inflation means „how fast prices rise”. When inflation falls prices aren’t falling, they are rising slower.

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CSI_Tech_Dept t1_jegyojj wrote

Well, there could be a negative inflation which we typically call recession.

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thomas0088 t1_jefaz2r wrote

Falling inflation does not mean that prices will drop

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berzemus t1_jefqdja wrote

Dropping prices would be a deflation.. that would be ugly

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lobbarr t1_jegbpxo wrote

Why? Everyone says is bad but I never saw an example where it's really bad.

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SapCPark t1_jegxpvb wrote

Deflation means its more expensive to borrow money so credit tightens, loans are more expensive, and jobs are lost. The 2008 recession saw this

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Haptoh t1_jegl6h5 wrote

Ever heard of the Great Depression?

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Liraal t1_jeh1ffq wrote

Generally our economy is tuned to expect money remaining in circulation (i.e. being re-invested). Under deflation, said money stays under your bed instead since it appreciates faster than it would if you were to invest, new companies are not created, old ones cannot get loans or funding and everything generally grinds to a halt. An economy structured around stable performance probably wouldn't struggle that much with this, but that is not the economy we have.

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