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The biggest is inflexible liquidity. Here’s a great overview of the good and bad deflation experienced in the 1880s due to the gold standard. NGDP targeting aims to provide the best of both worlds

Yes, but perma-inflation was not. Its the lack of natural, productivity-driven deflation cycles that’s most problematic in the 20th/21st centuries

Sure, here are four: 1. US 1880s 2. China 1998-2002 3. Costa Rica today 4. Switzerland today And here is a broad study of 17 countries with the same conclusion (sometimes its good, sometimes its bad) www.nber.org/system/files...

Depends on the cause of deflation. Crashes are bad, but moderate deflation caused by productivity growth is fantastic for workers and households

Im skeptical about using demand-side tools to solve supply-side problems, but agree strongly with the independence point

The Democratic party needs to put real take home wages front and center.

That it is useful to tell toddlers “no.” It’s way more constructive/effective to provide attractive alternatives

Yes, productivity-driven deflation is also broad-based and empirically quite common globally, just not in regimes (like the US) that mandate inflation

My key point is: deflation caused by productivity growth is good for consumers/households and mostly neutral for producers. And I think this is highly relevant to our present economy.

Ok, I read this paper as: “there is no clear relationship between inflation and real output growth. The scatterplot is a mess.” This matches the economic theory that deflation may be caused by: 1. Supply growth 2. Demand drop 3. Reduced liquidity Each scenario has relative winners and losers

Or as Bill Lazonick says: The function of the stock market isn’t raising money for corporations, its function is to get money out of them.

Prices also go down due to productivity growth, which is both common and desirable

This seems like bad faith debate

This isn’t an isolated finding. I could give you many papers that claim, “Whether deflation is good or bad depends on the cause.”

I did, here’s the link: www.nber.org/system/files...

Yeah agree in terms of productivity level. I think the bigger point is that productivity growth naturally causes deflation (more goods, same # of dollars)

GLP-1 drug use cuts grocery spending by 6%, study finds | Food Dive www.fooddive.com/news/glp-1-d...

Interesting question - my first reaction was “no way” but now I’m head scratching

Demand destruction = not good. Especially when it’s food. Curious if there is more to this story.

This is why DSA candidates are really taking off now instead of eg in 2020 or 2018 www.gelliottmorris.com/p/2026-07-07...