Cash Quote by Paul Krugman
“If the price of everything is going down, that's going to include wages as well. People will have an incentive to sit on their cash and not spend it.”
About This Quote
Source Speech: Economic Column, The New York Times, 2010
When prices fall, wages tend to fall too, discouraging spending and prompting people to hoard cash.
In simple terms: Deflation can cause wages to drop and spending to stall.
Key Takeaway
Watch for deflationary pressures.
Themes
economics
inflation
consumer behavior
Mood
cautious
analytical
Type
economic
policy
When to use this quote
- policy making
- personal finance
- business strategy
Key Concepts
deflation
wage dynamics
cash hoarding
Questions to Reflect On
- How does deflation affect long‑term growth?
- What policies can counter wage deflation?
A Different Perspective
Deflation may also spur unemployment and reduced investment.
