It’s more run away/chain reaction type events you want to avoid I think rather than a low % inflation or deflation that remains relatively stable, swing too far in either direction and you’ll have problems.
Conventional economic theory holds that a small, consistent level of inflation is the most beneficial. In short, you don’t want hoarding cash to be a smart long term economic decision, you want more of that money invested/moving in the economy. I recommend reading about the Japanese deflation in the 90s if you’re curious what the effects of even relatively moderate deflation can be.
It’s more run away/chain reaction type events you want to avoid I think rather than a low % inflation or deflation that remains relatively stable, swing too far in either direction and you’ll have problems.
Conventional economic theory holds that a small, consistent level of inflation is the most beneficial. In short, you don’t want hoarding cash to be a smart long term economic decision, you want more of that money invested/moving in the economy. I recommend reading about the Japanese deflation in the 90s if you’re curious what the effects of even relatively moderate deflation can be.