Re:Monetagium – monetary extortion in feudal Europe
by Qwertious on Sunday August 04, 2024 @12:36AM
(#41151170)
>Otoh, certain products like TVs do seem to get better and cheaper as time goes on, yet people don’t seem to delay purchases. It’ll be interesting to see if conventional wisdom about deflation holds, should it come to pass.
The problem isn't just the osborne effect, it's that deflation rewards a non-productive investment (money hoarding) that crowds out productive investments, which makes the economy less efficient.
Buying a TV comes out of spending money rather than savings/investment, and is harder to evaluate because if TVs are getting better and cheaper in the future, they're getting better and cheaper now and so people have more reason to upgrade in the first place - which offsets the incentive to delay the upgrade for future benefits.
Imagine if everything suddenly was infected with the Osborn Effect.
Otoh, certain products like TVs do seem to get better and cheaper as time goes on, yet people don’t seem to delay purchases. It’ll be interesting to see if conventional wisdom about deflation holds, should it come to pass.
https://en.wikipedia.org/wiki/Osborne_effect