It's not a single localized variable. It's entire product lines.
For instance, cars. You can buy last year's model at a discount. Or software. Or TVs. All electronics.
Saying it's "micro" vs "macro" and a bunch of hand waving around dynamic localized variables is not an explanation.
The core argument of the danger of deflation is "no one will buy anything if they know the price is going to come down". I can point to several counter examples and I can't get a straight answer why this is not true in these examples, or why deflation is so dangerous not relying on that argument
I've read plenty of econ textbooks. I can easily explain why inflation is bad and it doesn't take me forever. Its a backdoor method of taxation. It robs people of their savings, especially the less fortunate who don't have their savings in financial assets. It also hurts mostly poor people that disproportionately spend their income on non-discretionary items like food and shelter. It provides uncertainty and inefficiencies and makes operating a business harder (in extreme cases). Every extreme inflationary cycle (and there are many examples) were disastrous in terms of any available metric (deaths, despair, poverty, crime, etc).
> The core argument of the danger of deflation is "no one will buy anything if they know the price is going to come down". I can point to several counter examples and I can't get a straight answer why this is not true in these examples, or why deflation is so dangerous not relying on that argument
I don't think this is the core argument of anything, assuming you are talking about consumer spending. a large chunk of consumer spending is on daily necessities like food. even with luxury items, deflation has to be quite strong to outweigh the desire to "have it now". inflation/deflation are most impactful to entities that are sitting on large amounts of cash. this does not describe the majority of consumers.
my understanding is that the major issue with deflation is on the investment/credit side. if you can get a solid risk-free return on your pile of cash, it lowers the incentive to do risky things like start a business or lend money to others to start a business. eventually the lack of credit and new investment decreases production to the point of reverting to an inflationary environment. this could either be a slow oscillation between the two or periodic shocks.
I think you're wrong about the "deflationary spiral" as not being the central argument as to why deflation is dangerous. You can see it featured predominantly in the Wikipedia for example.
As to no one investing, nominal interest rates are based in part on expectations and the risk free rate. Kind of like two years ago my savings account was paying nothing and now you can get close to 5% risk free just to park your money. So in a deflationary environment you can think of money appreciating in real terms ($1 would buy you more a year from now), so required investment rates would have to adjust.
But it's still true today with technology. If I raise money for an AI startup today I would be using the money to buy GPUs, but if I wait a year from now I'll be able to buy them more cheaply (or buy better ones). But people still raise money to buy quickly deprecating assets. Or if someone wants to start a Laundromat and buys quickly deprecating machines. Or any industry that requires capital investment in a deprecating asset
Of course you have to consider the deprecation of the assets you're buying but the world doesn't stop because prices go down and it's actually fairly healthy. And the benefit would be the opposite of the dangers I listed before about inflation. Imagine everyone getting a raise every year because of technologocal progress. Imagine spending less and less on groceries because we improve tech to deliver cheaper food. Instead that's all masked by money creation.
For instance, cars. You can buy last year's model at a discount. Or software. Or TVs. All electronics.
Saying it's "micro" vs "macro" and a bunch of hand waving around dynamic localized variables is not an explanation.
The core argument of the danger of deflation is "no one will buy anything if they know the price is going to come down". I can point to several counter examples and I can't get a straight answer why this is not true in these examples, or why deflation is so dangerous not relying on that argument
I've read plenty of econ textbooks. I can easily explain why inflation is bad and it doesn't take me forever. Its a backdoor method of taxation. It robs people of their savings, especially the less fortunate who don't have their savings in financial assets. It also hurts mostly poor people that disproportionately spend their income on non-discretionary items like food and shelter. It provides uncertainty and inefficiencies and makes operating a business harder (in extreme cases). Every extreme inflationary cycle (and there are many examples) were disastrous in terms of any available metric (deaths, despair, poverty, crime, etc).
https://www.visualcapitalist.com/inflation-chart-tracks-pric...