Quote from: DanielT on January 31, 2015, 05:10:55 PM

Quote from: username18333 on January 31, 2015, 05:40:04 AM

Quote from: deflation, Merriam-Webster, Inc. link=http://www.merriam-webster.com/dictionary/a?ref=dictionary&word=deflation#

2 : a contraction in the volume of available money or credit that results in a general decline in prices

(Red colorization mine.)

The supply of electronics was expanded.

That is a fail definition if you are trying to defend the idea of deflationary spiral. A Keynesian would say that deflation is price decrease, and not a contraction of money supply. (which never ever happened)

Quote from: dinofelis on January 31, 2015, 05:42:39 PM

Quote from: username18333 on January 31, 2015, 05:40:04 AM

. . .

The supply of electronics was expanded.

That has nothing to do with it. We are not looking at the electronics offer and demand. We are looking at the supposed driving force behind a deflationary spiral if ever there would be a mild deflation: namely the idea that people will not spend NOW to buy something at price X if they simply have to wait for TOMORROW for it to be at price 0.95 X.

. . .

So, if food, and the biggest market in the world, consumer electronics, are not exhibiting the postulated general property of "if people know it's going to be cheaper tomorrow, they will hoard their money today" then the evident truth of that postulate may seriously be questioned.

And it is at the basis of the "deflationary spiral" theorem: "a bit of deflation will make some people postpone their spending to get things cheaper tomorrow, which will induce even more deflation, which will make more people postpone their spending, and so on, until everybody stops spending and waiting for better prices tomorrow"

. . .

1. By the very denotation of deflation (see my previous post) it does.

2. a) [P]eople (dinofelis) (Who, exactly are you talking about?) do postpone the purchase of electronic goods and, thus, so hoard their capital.
2. b) That deflation (dinofelis) is the conventional deflation a contraction in the volume of available money or credit (Merriam-Webster, Inc.).