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WhaTHellsgoingonhere

(5,252 posts)

11. That's deflation. You don't want that

Reply to nilesobek (Original post)

Sun Jan 31, 2016, 01:34 PM

Jan 2016

A number of readers have asked me to explain why deflation is a bad thing; and the truth is that while I’ve alluded to the issue a number of times, I’m not sure if I’ve ever laid out the whole case. So here goes.

...the argument that deflation is a bad thing is also an argument saying that some economic problems get worse as inflation falls, and that too low an inflation rate may actually be economically damaging.

http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation-bad/?_r=0

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19 replies

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Highlight:

Why haven't consumer goods taken the same price drop as gasoline? [View all] nilesobek Jan 2016 OP

In regards to groceries...climate change unapatriciated Jan 2016 #1

I was always told by retailers nilesobek Jan 2016 #8

We are starting to see a shortage in produce unapatriciated Jan 2016 #16

actually milk, at least, seems to be about $1 a gallon less than last year hfojvt Jan 2016 #2

Not around here. Pretty much the same price. hobbit709 Jan 2016 #6

Gasoline forms a fairly small part of the cost of most goods muriel_volestrangler Jan 2016 #3

You are right but when gas is high they use the excuse to raise groceries yeoman6987 Jan 2016 #5

Most grocery stores don't bring down their prices when gas is cheaper meow2u3 Jan 2016 #19

Basic Capitalism - prices based on seller willing to sell at and market willing to bear it. NutmegYankee Jan 2016 #4

Once the price goes up it rarely comes down. SamKnause Jan 2016 #7

So we are being ripped off nilesobek Jan 2016 #10

Yes we are being ripped off and forced to buy overpriced necessities. SamKnause Jan 2016 #13

Lower oil prices, at present levels of production cost, are not economically beneficial Spider Jerusalem Jan 2016 #9

Wow. Two billion a day losses. nilesobek Jan 2016 #14

It probably wasn't anticipated Spider Jerusalem Jan 2016 #15

That's deflation. You don't want that WhaTHellsgoingonhere Jan 2016 #11

Amazon, Walmart, Target et al have an even bigger monopoly on consumer goods JCMach1 Jan 2016 #12

Our local HyVee grocery raised prices substantially after the first of the year. Frustratedlady Jan 2016 #17

Because gasoline is only a small input for other prices. Zynx Jan 2016 #18