> Deflation tells consumers not to buy as you wait 6 months and it'll be cheaper.
I live in Japan for many years and I have never seen such thing as deflation here. Prices have remained stable for most items or have increased a little bit. The idea that stuff becomes cheaper as you wait is ludicrous in Japan.
Inflation/deflation indexes are massively skewed if you don't incorporate the right things into it. How sure are you that these indexes are factually correct?
Keynesian economists think that Japan's real estate implosion was deflation.
Back in reality, Japan hasn't suffered any real deflation in 25 years. Which is why their prices are among the highest for pretty much everything.
The deflation argument is a fraud cover for the failed Keynesian experiment. It's meant to give them the ability to endlessly print to debase the debt that the failed experiment took on. That's why the US Fed pretends to worry non-stop about deflation, while they massively expand the monetary base and hold rates at zero; it's a lie to provide cover for the massive inflation programs.
No serious economist believes the old wives tale about deflation keeping consumers on the sidelines while they wait to save 1 cent (or yen) on a can of soda next year. But it's got "truthiness" so it keeps getting brought up in these HN discussions.
> No serious economist believes the old wives tale about deflation keeping consumers on the sidelines while they wait to save 1 cent (or yen) on a can of soda next year.
A serious economist is able to differentiate between goods that can (and will) be delayed an a consumable like a can of soda. Cars are an example of a consumer good where consumption observably is affected by deflation.
Yes. This whole "deflation makes customers delay their purchases" thing is annoying precisely because there really are much better reasons for worrying about deflation, and serious economists are warning against deflation all the time. It is just for different reasons, mostly having to do with the fact that the economy runs on debt, and deflation kills debtors.
Yeah, economics has become very political and it doesnt help that the subject is pretty poor anyway in terms of evidence. The HN economics discussions are cringeworthy, just people shoving half understood falsehoods around.
The deflation is often masked by advances in technology.
A new 150,000/month condo in Tokyo in 2014 has much better facilities than a then-new 150,000/month condo in Tokyo in 1994. Indeed, the latter is probably struggling to achieve rents of half that today.
That has virtually nothing to do with deflation. This has to do with housing/land regulations in Japan, causing the value of apartments to decrease over time. There was an excellent article about that on HN a couple of months back, by the way.
On top of that, buying a new apartment has nowhere got cheaper than it was 10 years ago. Prices have been pretty much stable until they pumped up the tax recently.
I live in Japan for many years and I have never seen such thing as deflation here. Prices have remained stable for most items or have increased a little bit. The idea that stuff becomes cheaper as you wait is ludicrous in Japan.