• TheDrink [he/him]@hexbear.net
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    6 days ago

    That is an effect, it also increases the relative value of debts which isn’t great, but the negative impacts of those is less than the potential positive impact of reducing the relative cost of living. Really what you’ve got to focus on if you’re a government trying to manage deflation is a) capital flight and b) wage reduction, because the biggest negatives are seen if investment gets pulled out of the economy and the positives aren’t realized if people’s wages don’t stay the same.