Editing Deflation (section)

=== On savings and investments ===
Deflation can discourage private investment, because there is reduced expectations on future profits when future prices are lower. Consequently, with reduced private investments, [[#Deflationary spiral|spiraling deflation]] can cause a collapse in [[aggregate demand]]. Without the "hidden risk of inflation", it may become more prudent for institutions to hold on to money, and not to spend or invest it (burying money). They are therefore rewarded by [[saving]] and holding money. This "hoarding" behavior is seen as undesirable by most economists.{{citation needed|reason=Hayek's word alone is not a reliable source regarding what most economists think, especially when he was writing in 1932. Other sources are needed, particularly reflecting the state of the field in the 21st century.|date=September 2022}} [[Friedrich Hayek]], a [[libertarian]] [[Austrian school|Austrian-school economist]], wrote that:

{{Blockquote|It is agreed that hoarding money, whether in cash or in idle balances, is deflationary in its effects. No one thinks that deflation is in itself desirable.|source=Hayek (1932)<ref>{{cite web |url=http://butnowyouknow.net/those-who-fail-to-learn-from-history/hayeks-1932-letter-on-the-great-depression/ |title=Hayek's 1932 Letter on the Great Depression |work=But Now You Know|date=25 November 2010 }}</ref>}}