lobbarr t1_jegbpxo wrote on March 31, 2023 at 8:24 PM

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

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

SapCPark t1_jegxpvb wrote on March 31, 2023 at 10:59 PM

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

Haptoh t1_jegl6h5 wrote on March 31, 2023 at 9:28 PM

Ever heard of the Great Depression?

Liraal t1_jeh1ffq wrote on March 31, 2023 at 11:27 PM

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.