Money & WorkFact

Falling prices sound great. Economists fear them more than inflation.

If everything is cheaper tomorrow, you postpone buying. Firms sell less, cut prices, cut jobs, and everyone waits even longer. Meanwhile debts stay the same in nominal terms but get heavier in real terms. Japan was stuck in this spiral for decades from the 1990s onward.

Useful: That's why the ECB sticks to 2% inflation rather than zero.

Source: de.wikipedia.org

Inflation Preise Wirtschaft

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