# deflationary

My concern about the economy: A #deflationary #recession ......
When the economy contracts while prices fall instead of rise.
It’s a dangerous cycle because falling prices can worsen the slowdown. Here’s how it typically starts:
1. Triggering Shocks
Demand collapse: A financial crisis, burst asset bubble, or external shock (e.g., pandemic, geopolitical turmoil) leads consumers and businesses to pull back on spending.
Debt overhang: High levels of private or public debt can magnify the effect. As credit tightens, households and firms cut back, amplifying weakness.
Tight monetary or fiscal pol