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RE: Does Deflation Spur Consumption? (Contrary to conventional Wisdom)
Consumers are more inclined to spend as a result of falling prices. What store advertises "rising prices" in order to sell more product today? Only in circumstances where there is a hard deadline and little competition can merchants advertise rising prices and motivate some people to spend earlier.
That doesn't sound true. Do the words "buy now and lock in this great deal" not sound a teensy bit familiar to you? Sellers use this tactic all the time. I don't know if it works - but many many people seem to believe that it does.
I attempted to acknowledge that it works for "big price jumps". But "buy today and save 3% over NEXT YEAR" is meaningless. Those deals only work when the savings over a short period of time is large.