#13 | Posted by Claudio at 2023-09-18 10:51 PM
Deflation does not kill demand or no one would buy a computer or flat screen TV. Those have had 20+ year deflation cycles. Look at gas - when prices goes down, demand goes up and the economy booms. Look at any staple food product - literally every one (take milk for example) is cheaper today that it was in 1995 inflation adjusted.
Your use of terminology and/or examples are poorly chosen.
Gas / oil / crude / refined and milk and other 'foods and foodstuff' as well as metals and currencies and many other very volatile economic inputs are what's known as "commodities" which have free-floating prices (and that is why their short- and medium-term "futures" are often traded on commodities exchanges) and can usually be imported and exported freely, with prices reacting to their overall expected availability or need over that future time period.
That's why the terms inflation and deflation are inappropriate and rarely used in relation to single commodities and in fact, many commodity products prices are either uncorrelated to most others or priced directly opposite to certain other commodities - very rarely there is a synchronized price direction or action across all commodities.
Inflation and deflation are terms most appropriate to overall economy of relatively stable-priced over time "capital goods and services (~70% in the US)" or few "capital segments" or "core" of the economy like real-estate, for example.
Core inflation is the change in prices of goods and services, except for those from the food and energy sectors.
Mass-produced technology / electronic products like computers and their parts like processors, memory, storage etc. and TVs / monitors are becoming outdated so quickly that they behave a lot more like commodities with built-in obsolescence and therefore their value is almost constantly declining. That's why technology / automation is used to lower the cost of production and service, whenever and wherever possible, even if the initial cost of deployment may be higher.
In fact, technology and free trade with the countries where input costs of production were initially - at the time and for a time - much cheaper than in the US ("made in..." Japan, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, Indonesia, Philippines, Turkey, Mexico, Eastern Europe, China, India, Vietnam...) helped set a very long period of low inflation and/or disinflation in the US. As these countries have gotten richer (more capitalist) and more "expensive," the production and/or services moved to another place.
Why the economic deflation is bad? Because a lot of businesses / producers would stop producing and/or stock up on stuff they would sell at a loss, and the customers would wait to buy stuff they could buy cheaper later, and that would set up "negative feedback loop" and cause self-feeding "deflationary chain reaction" / "deflationary loop/spiral" - that's what happened more recently in the U.S. and most of the world during the Great Depression of late 1920s-1930s and Global Financial Crisis (GFC) of 2008-2010s aka the Great Recession.
Deflation is also harder to protect and fight against - it's been described as "pushing on a string" ... but that's another subject.
These should help :
www.stlouisfed.org - Inflation, Disinflation and Deflation: What Do They All Mean? - 2023-08-23 - Cassandra Marks
www.forbes.com - What Is Deflation? Why Is It Bad For The Economy?