What is deflation and how does it affect different countries?

What is deflation and how does it affect different countries?

Deflation is a decrease in the general price level of goods and services. It can lead to reduced consumer spending and economic slowdown.

Can you give examples of countries that have experienced deflation?

Sure! Japan in the 1990s and more recently, Greece during its financial crisis, both faced significant deflation.

What were the main causes of deflation in those countries?

In Japan, it was due to asset price bubbles bursting and a stagnant economy. In Greece, it was largely due to austerity measures and reduced consumer demand.

How does deflation impact everyday life for citizens?

Deflation can lead to lower wages, job losses, and increased debt burdens, making it harder for citizens to spend and invest.

Are there any benefits to deflation?

While deflation can lead to lower prices, it often results in economic stagnation, making it generally more harmful than beneficial.