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The heading even leads with "why is deflation bad for the economy".

Obviously there are situations where it is good and for certain people, say a right sizing of an overheating economy/sector but on the whole, and more generally, it is bad, not something you look to as fine or alright.



It would be helpful if you could actually read the article. Then you'd see that the article outlines some specific situations where deflation is bad for the economy, but concludes that it is good in general. You'd even take away as much if you only read the key takeaways section, but sadly that seems to be a tall order.


There is plenty of empirical evidence from the ~130 years or so prior to the Great Depression which shows why deflation (or rather restrictive monetary policy) was bad, stifled economic growth and lead to permanent boom and bust cycles and generally very high price volatility.


I've read it before my prior response and it ends off with:

"A little bit of deflation is a product of, and good for, economic growth. But, in the case of an economy-wide, central bank-fueled debt bubble followed by debt deflation when the bubble bursts, rapidly falling prices can go hand-in-hand with a financial crisis and recession."

This is what I'm saying.


Saying an economy-wide, central bank-fueled debt bubble followed by debt deflation is bad is very different to saying that deflation is very bad in general. This is simply trying to reframe your argument after the fact. Deflation isn't the cause of economic contraption as you said, it is the result.


I'm pointing out the article you referenced is saying its bad, the reason it says is exactly what I'm saying. It's fine short term but it's bad overall.

They're just saying in our debt fueled world, you can't merely print money to get out of jail free in a deflationary scenario as eventually the debt obligation gets too large relative to your shrinking economy size. We live in this world unfortunately where it's bad, in a hypothetical world without all the debt, it's still bad in the long term for the other reasons I've mentioned.




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