I don’t know if deflation itself is that harmful or if it’s just a symptom of economic troubles, i.e. lack of demand. In any case, if it persists, that’s not a good outlook for the Chinese economy.
Both, it’s a positive feedback loop, and in the end it doesn’t really matter what started it once the economy crashes you’ve gone through multiple lack of demand -> prices fall -> even more lack of demand iterations.
I don’t know if deflation itself is that harmful or if it’s just a symptom of economic troubles, i.e. lack of demand. In any case, if it persists, that’s not a good outlook for the Chinese economy.
Both, it’s a positive feedback loop, and in the end it doesn’t really matter what started it once the economy crashes you’ve gone through multiple lack of demand -> prices fall -> even more lack of demand iterations.
“positive” as in engineering, not as in good