• HobbitFoot @thelemmy.club
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    1 year ago

    i have no idea why a small amount of inflation is considered ideal

    Because it encourages money to participate in the economy. If an economy gets stuck in a deflationary cycle, it encourages people to stop putting their money into the economy to invest or to act as a way to get people to make purchases sooner.

    That can be ideal if you are anticonsumption, but not so much if you are relying on a low unemployment rate to help keep people happy.