42 sats \ 2 replies \ @Undisciplined 11 Feb \ on: China's Exported Deflation: Global Ramifications econ
This isn't something I've thought much about before. It seems to me like this will mostly help other economies handle deflation.
Homegrown deflation is difficult for businesses because it reduces revenue more than costs. Less expensive imports, on the other hand reduce costs, which should help businesses continue navigating a deflationary environment.
Of course, that also implies a distortion that will favor business that rely on Chinese imports.
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Right. The flip side of my argument is that producers of substitutes for Chinese goods will get a double whammy of homegrown deflation and imported deflation.
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