Conversation

Notices

1. Embed this notice
   Jessica :propride: 🇺🇦 🇵🇸 ✡️ (jewishreader@sfba.social)'s status on Monday, 12-Aug-2024 23:44:41 JST Jessica :propride: 🇺🇦 🇵🇸 ✡️

   I am not an economist, but in my understanding if consumers refusing to pay lowers the prices...the cause was not truly inflation in the first place? Please correct me if I'm totally off base.

   https://apnews.com/article/inflation-prices-consumers-economy-spending-federal-reserve-c69408f05baeffac0023ceb76b747999

   • Embed this notice
     Philip Weiss (Phil in SF) (kingrat@sfba.social)'s status on Tuesday, 13-Aug-2024 00:18:49 JST Philip Weiss (Phil in SF)

     in reply to

     @jewishreader consumers not being willing or able to pay higher prices is exactly how inflation lowers. one way at least. competition, price controls, new technology, etc. can also lower prices.

   • Embed this notice
     Jessica :propride: 🇺🇦 🇵🇸 ✡️ (jewishreader@sfba.social)'s status on Tuesday, 13-Aug-2024 01:33:19 JST Jessica :propride: 🇺🇦 🇵🇸 ✡️

     in reply to

     • Philip Weiss (Phil in SF)

     @kingrat Can you explain the mechanism to me? Because I feel like if people stopped buying there would be a glut of money lying around and the dollar's value would drop lower? Or does the corresponding glut of production offset that?

   • Embed this notice
     Philip Weiss (Phil in SF) (kingrat@sfba.social)'s status on Tuesday, 13-Aug-2024 01:56:41 JST Philip Weiss (Phil in SF)

     in reply to

     @jewishreader I'm no macro-economics expert, so I don't know what numbers to look at to tell the difference between the various influences on inflation. I can't say that people refusing to pay inflated prices is indeed the reason for inflation lessening, just that it's possible.

     As for the mechanism, people switch to cheaper substitutes (eating at home instead of McDonald's), or stop buying. Since this happens at the margins, I don't know how significant a change is needed before we start having a glut of money.