[JumpCrisscross]

> people who seem to literally believe that without inflation people will refuse to invest in anything and choose to return to a cave-dwelling existence

Yeah, I’ve seen them. They’re wrong. The point is price levelling is computationally expensive. It can never come for free. If your economy is dynamic—let alone growing—prices will slip. From time to time, they will do so in a generalised form.

I actually think policymakers’ aversion to deflation comes from its intractability. Lots of societies have collapsed before they could solve deflation. Our examples of inflationary shitshows is partly due to their resilience—a deflating society starves fast.

[roenxi]

> Lots of societies have collapsed before they could solve deflation.

Are there? What were these societies?

If I go to the deflation page on Wikipedia (https://en.wikipedia.org/wiki/Deflation) the preponderance of examples are places that are actually pretty nice to live and as far as I can see have uniformly not collapsed.

[littlestymaar]

Look up Brüning maybe? ;)

[roenxi]

I looked him [0] up. They were trying deflation because they'd tried inflation in the 1920s and that, spectacularly, didn't work. The issue at the time seems to have been that old favourite; the Treaty of Versailles. Germany at the time was under what was described as a "Carthaginian peace" by Keynes who took the opinion that it was trying to destroy Germany's economy.

Given that the German economy then failed; I don't think that is necessarily a reasonable example of failed internal policy. It would be reasonable to interpret it as a society burdened with too many debts to foreign powers with no way to recover.

[0] https://en.wikipedia.org/wiki/Heinrich_Br%C3%BCning

[littlestymaar]

It's fascinating to see how closed minded you are and how it makes you read everything in the way that fit your preconceptions. Feel free to live with your confirmation bias, but then do not wonder why the world seems to be going backward around you ;).

[roenxi]

Do you have a second example of deflationary collapse? I don't think the collapse of the Wiemar Republic is a great example. Maybe if we crop off 1 outlier we'll find something we can agree on.

Possibly not of course, I do suspect that the problem is bad debts and the deflation is the last straw before things go bad. There are some well established links between debt and sudden collapses and I tend to blame the debts.

[JumpCrisscross]

> Do you have a second example of deflationary collapse?

The Great Depression.

Here is a paper that argues deflation is fine: https://www.nber.org/system/files/working_papers/w10329/w103.... It’s incredibly convoluted and unorthodox.