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  • SeaJ
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    10 months ago

    They go up in communist countries too but with the added benefit of shortages and rationing to keep prices relatively in check.

    And small inflation is not bad. As long as it is stable and predictable, it does not matter much since people know roughly what price to expect. Theoretically it should be the same for deflation but workers tend to not also accept lower wages when prices drop. It also leads to banks not lending out so you can really only start a business or buy something big if you already have the money. While that is easy enough for people who are rich, it limits social mobility of those who would have to borrow to do the same since finding a lender is more difficult.