12-01-2024, 05:02 PM
Deflation rarely happens but when it does it can down an economy for years and decades. The last major economy to experience deflation was Japan leading to an era called lost decade......
The longer you get deflation the hard it is to snap out of it as it is a vicious cycle. Late in his term, Greenspan saw deflation building up. He described it as dangerous because economic theory and solution is well established for high inflation but not deflation. He quickly pull out all stops and killed deflationary tendency at its infancy.
Chjna has been reactjng very slowly allowing deflatikn to set in. Same mistake as Japan.
In economics allowing econkmy to slide jnto deflation is a deadly sin.
![[Image: eokD1Ml.jpg]](https://i.imgur.com/eokD1Ml.jpg)
https://www.bloomberg.com/news/articles/...eak-demand
The longer you get deflation the hard it is to snap out of it as it is a vicious cycle. Late in his term, Greenspan saw deflation building up. He described it as dangerous because economic theory and solution is well established for high inflation but not deflation. He quickly pull out all stops and killed deflationary tendency at its infancy.
Chjna has been reactjng very slowly allowing deflatikn to set in. Same mistake as Japan.
In economics allowing econkmy to slide jnto deflation is a deadly sin.
https://www.bloomberg.com/news/articles/...eak-demand
