this post was submitted on 07 Dec 2023
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How does inflation correlate with more savings vs more spendings? (lemmy.nz)
submitted 11 months ago by luthis@lemmy.nz to c/asklemmy@lemmy.ml
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A recent article: https://www.stuff.co.nz/business/money/301022706/prepare-to-find-another-70-a-week-to-get-by-in-2024-asb

says: ..if households decided the worst was over and started to feel more confident about spending, it could push up inflation

But I thought it was the opposite;

More spending means more demand means more supply, which means production costs go down (due to economies of scale)โ€ฆ so inflation goes down?

But saving means less spending, means less demand, means less income for business, means costs go up.. so inflation would rise?

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[โ€“] 0x4E4F@infosec.pub 1 points 11 months ago

Mhm, I see. Thank you for your answer ๐Ÿ‘.