Does deflation seriously keep normal people from spending money? askeconomists

I've read a few times recently that one of the major downsides to deflation is that it encourages people to save (hoard) their money because it will be worth more (buy more) later. However, I find it really hard to rationalize that if we see small amounts of deflation (e.g. not like Venezuela) it really won't change much of anything spending-wise. If prices drop by 1% a year I'm still going to buy a refrigerator when mine dies, a car when mine gets old etc... I'm not thinking "oooh... I could save $8 if I wait and buy the fridge next year!".

I'm confused as to whether this is a real threat or just one of those "in a rational market..." propellerhead statements.

Submitted February 27, 2015 at 12:29AM by ManDrone http://ift.tt/1AcjAaz askeconomists