No, it’s bad. It creates a deflationary spiral that kills all kinds of businesses. Japan’s economy has been fucked for decades by low growth because of deflation.
If people don’t spend money, companies fire workers. Then people spend less money because they have no jobs. So companies fire even more workers. Thrift is bad in aggregate.
The major difference between that and what Japan is experiencing is that The Great Depression was cause by inflationary causes, not deflation, and the US government printing more money wasn’t going to help there. Meanwhile Japan has been printing boatloads of money for decades trying to trigger inflation, and are barely managing to stave off deflation.
The other major difference is that during The Great Depression, US couples were having children. Japan has been in a population Freefall the entire time.
No, it’s bad. It creates a deflationary spiral that kills all kinds of businesses. Japan’s economy has been fucked for decades by low growth because of deflation.
If people don’t spend money, companies fire workers. Then people spend less money because they have no jobs. So companies fire even more workers. Thrift is bad in aggregate.
I like to remind people that the last time we had a really bad deflationary recession, it was so bad that we called it a “depression”…
The major difference between that and what Japan is experiencing is that The Great Depression was cause by inflationary causes, not deflation, and the US government printing more money wasn’t going to help there. Meanwhile Japan has been printing boatloads of money for decades trying to trigger inflation, and are barely managing to stave off deflation.
The other major difference is that during The Great Depression, US couples were having children. Japan has been in a population Freefall the entire time.