Deflation and deflationary spiral explained in 3 minutes
4.6 هزار بار بازدید -
3 سال پیش
-
A short 3 minute video
A short 3 minute video about #Deflation including understanding #DeflationSpiral . Looks at the consequences of deflation as well as the deflationary spiral by using a very simple example. A great way to understand #DeflationEconomics.
The first 30 seconds or so has a definition of deflation and defines it as a period where, on average, prices are consistently falling. As such it is the opposite of inflation.
We then look at consumer behaviour when faced with deflation. Although it is rational for each individual to defer spending when prices are expected the fall the collective impact is bad. If everyone stops spending, consumer demand falls, with less demand unemployment rises, economy wide household income drops, leading to further downward pressure on prices. And the whole thing starts again, this is the deflationary spiral.
support me and https//Patreon.com/economicsunderstood
The first 30 seconds or so has a definition of deflation and defines it as a period where, on average, prices are consistently falling. As such it is the opposite of inflation.
We then look at consumer behaviour when faced with deflation. Although it is rational for each individual to defer spending when prices are expected the fall the collective impact is bad. If everyone stops spending, consumer demand falls, with less demand unemployment rises, economy wide household income drops, leading to further downward pressure on prices. And the whole thing starts again, this is the deflationary spiral.
support me and https//Patreon.com/economicsunderstood
3 سال پیش
در تاریخ 1400/07/06 منتشر شده
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