Corporate also demand
resources in the market... Lower prices of resources would lower cost thereby
more profits... Deflation has not been explored properly since we assume that
in the long-run increase in population would increase demand and prices with scarcity
of resources... But, the conclusion seems to be reversed with decreasing
population growth rate in many developed countries... In the light of this
evidence we might conclude that slowing population growth-rate could lower
demand and increase supply which could also lower prices and probably
deflation... As observed in the US, Japan, Europe... In these developed
countries deflation shows that supply-side is not a problem with zero-nominal
interest-rates... Economists know that deflation is good for the poor and not
for Capitalist... But lower input cost might help save more to invest more for
the Capitalist... However, after full-employment prices or inflation might
increase because wages could increase to attract labor... Central bank can
lower capital-cost to zero to incentivize supply but it can not cut wages
unless it cuts real-rates with inflation, but not to zero... Deflation with
downward nominal wage rigidity is likely to increase real-wages which is good
for demand... Low prices may also increase savings...
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