>"Should I spend it today, tomorrow or in 10 years?"
Whenever the "future" benefit does not outweigh the "current" benefit of said money. People do it now with the interest rates the other way around, why would it be any different with deflation? I.e. they spend now, or they invest now, or they invest in financial instruments now that will beat "inflation".
Both sides of inflation/deflation affect peoples' actions based on their time preference of money[1].
[1] Economists correct me on my usage of that term, if I'm wrong.
zo1|11 years ago
Whenever the "future" benefit does not outweigh the "current" benefit of said money. People do it now with the interest rates the other way around, why would it be any different with deflation? I.e. they spend now, or they invest now, or they invest in financial instruments now that will beat "inflation".
Both sides of inflation/deflation affect peoples' actions based on their time preference of money[1].
[1] Economists correct me on my usage of that term, if I'm wrong.