How does inflation correlate with more savings vs more spendings? (lemmy.nz)

submitted 11 months ago by luthis@lemmy.nz to c/asklemmy@lemmy.ml

10 comments fedilink hide all child comments

A recent article: https://www.stuff.co.nz/business/money/301022706/prepare-to-find-another-70-a-week-to-get-by-in-2024-asb

says: ..if households decided the worst was over and started to feel more confident about spending, it could push up inflation

But I thought it was the opposite;

More spending means more demand means more supply, which means production costs go down (due to economies of scale)… so inflation goes down?

But saving means less spending, means less demand, means less income for business, means costs go up.. so inflation would rise?

you are viewing a single comment's thread
view the rest of the comments

[-] 0x4E4F@infosec.pub 1 points 11 months ago

So basically, less spending will decrease inflation in the short run. What about the long run?

[-] Lauchs@lemmy.world 3 points 11 months ago

Prices are sticky but the rate of inflation slows. Hopefully at least. You don't want to slow spending down so much so as to cause a recession, it's a fine balance.

Given how long term an issue like inflation is, trying to tame it is a relatively new experience/adventure for humanity.

[-] 0x4E4F@infosec.pub 1 points 11 months ago

Mhm, I see. Thank you for your answer 👍.

this post was submitted on 07 Dec 2023

28 points (96.7% liked)

Asklemmy

43859 readers

1706 users here now

A loosely moderated place to ask open-ended questions

Search asklemmy 🔍

If your post meets the following criteria, it's welcome here!

Open-ended question
Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
Not ad nauseam inducing: please make sure it is a question that would be new to most members
An actual topic of discussion

Looking for support?

Looking for a community?

Lemmyverse: community search
sub.rehab: maps old subreddits to fediverse options, marks official as such
!lemmy411@lemmy.ca: a community for finding communities

~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~

founded 5 years ago

MODERATORS