Why is deflation more dangerous than inflation?

Описание: An excess supply of goods or a lack of adequate demand in the economy can lead to falling prices, a phenomenon known as deflation. Economists generally consider low levels of inflation to be the default state for an economy, as slight inflation is typically seen as a sign of a healthy, growing market. However, some countries, notably Japan and China, have experienced persistent deflationary pressures and low wages. This situation is often attributed to their high levels of innovation and efficient production capabilities, which increase supply and reduce costs. Despite the benefits of technological advancements and productivity gains, these factors can suppress wage growth and consumer spending, creating a challenging economic environment characterized by sustained deflation.

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