Inflation never went negative, so prices haven’t gone down. Positive inflation ensures prices nearly always steadily rise. The article is saying the rate of inflation is the lowest it’s been for a while which means prices are rising at the slowest pace for a while.
I suppose you can point that out, but it’s worth saying that the deflation that’d be required to decrease prices would be way more catastrophic than the semi high inflation we experienced. With deflation people are encouraged to keep their money in the bank instead of investing or spending, which means businesses lose profits and banks become more hesitant to lend, which means businesses fail and lay off workers, which means less consumer spending and investing and so on. Deflation leads to the economy collapsing while modest inflation leads to economic growth.
Nonsense. If the population grows then that means there would be more demand for money, not less. If inflation goes up in this scenario, then that can only mean the money supply has increased. Theres nothing wrong with deflation.
Inflation never went negative, so prices haven’t gone down. Positive inflation ensures prices nearly always steadily rise. The article is saying the rate of inflation is the lowest it’s been for a while which means prices are rising at the slowest pace for a while.
well, if it went negative it becomes deflation
Yea I’m just pointing out that prices are not going to come down and will only keep going up albeit more slowly than before
I suppose you can point that out, but it’s worth saying that the deflation that’d be required to decrease prices would be way more catastrophic than the semi high inflation we experienced. With deflation people are encouraged to keep their money in the bank instead of investing or spending, which means businesses lose profits and banks become more hesitant to lend, which means businesses fail and lay off workers, which means less consumer spending and investing and so on. Deflation leads to the economy collapsing while modest inflation leads to economic growth.
Worth noting that most nation-states will aim for an inflation rate of about ~3-4% annually to account for things like a growing population
Source? Most OECD nations aim for ~2%.
Sure glad my annual cost of living bump is 2-3%
Nonsense. If the population grows then that means there would be more demand for money, not less. If inflation goes up in this scenario, then that can only mean the money supply has increased. Theres nothing wrong with deflation.
Am I reading this right, that you think if there’s more demand for money it would drive prices down? That is incorrect