What is deflation and is it really scary? ...

Deflation Many people may be worried, if it happens, it may have an impact on the overall economy of the economy, the country may have lost their jobs, affect the money we hold, let's get to know the financial condition Well, it's actually really scary or ...

Deflation or in English is called Deflation, the meaning is brief. Conditions in which the prices of products and services in the market decline Because no one to buy As a result, manufacturers have to reduce production capacity to induce consumers to buy products. If in this condition for a long time Employment will also decline. Value for money increases The amount of money in the hands of the people is too little. The consequences will have dire consequences for the economy. Impact in a chain on people's living standards …

However, the amount of money in circulation is insufficient for the size of the economy. But not all products have to be discounted. But when we look at the gross commodity price, the average bean price has dropped itself. Usually, the obvious deflation symptoms are We will see negative numbers of inflation. By the aforementioned negative numbers It has to be caused by the declining prices of products and services in general. This is related to the supply side and the demand side and there may be other factors consisting of ...

Types of deflation are both soft deflation. Deflation is considered good for the economy because the system may each make money in the markets generally fell, people can buy goods at lower prices and in greater quantities. But if the deflation begins to fall into the medium and severe deflation. Will have a negative effect on the economy And it affects people and the national economy. Yes, ever ...

The cause of deflation is because the demand for goods or services is less than the demand for the sale of goods or services. Make the product exceed the demand Product price decreases And this may be due to the government collecting too much tax. As a result, the amount of money that people will buy is less. People keep too much money with themselves. Causing the consumption of aggregates to decrease And lack of cash flow Too much money is being sent abroad. Causing the amount of money in circulation in the country is low And deflation is often the result of a bubble burst. Causing bad debt problems And less confidence in investment This makes the financial sector more cautious in product release.

The effects of deflation cause manufacturers loss, sluggish trade, production liquidation. Unemployed worker There is a problem of unemployment. Economic downturn The government is unable to collect taxes on income earners and producers on target. At the same time, the government has to bear the burden of solving the problem of unemployment and the economic downturn ...

How can we avoid deflation that can negatively affect the economy? It is a problem to consider and be aware of deflation that we can avoid the deflation by means of economic stimulus. Different types of people involved, such as From the use of monetary policy such as interest rate cuts Or the use of fiscal policy such as tax cuts, government spending on projects to create jobs and investments, and more etc ...

Article and lectured by : Dolravee Phattharakulpimol
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