I'm curious to know if this is a real phenomenon that has been observed. Would you be able to point me in the direction of resources to learn more about this?

The reason for my skepticism is that even without deflation, a dollar tomorrow is usually worth more than a dollar today, yet tons of people* don't save or invest much/any of their money, even if they're able to.

* I'm speaking from the perspective of an American FWIW.

A dollar tomorrow is worth less than it is today

Your local bank or credit union will trade your dollar today for more than a dollar tomorrow!

And they will simply take your physical dollar and store it deeeep under the ground where no wild west thieves can steal it or even look at it, so that they can store it until tomorrow where it will be worth more!

Japan had deflation. Can search for information on that. Many articles out there about it.

> even without deflation, a dollar tomorrow is usually worth more than a dollar today

No, that’s deflation.

If you’re talking about investing, that’s different. The dollar is still worth less on its own. It just made extra dollars in the meantime.

> This eventually locks the entire economy up into a death spiral.

The US economy had zero net inflation from 1800 to 1914. No death spiral.

The whole "2% is good for the economy" is propaganda to hide the fact that deficit spending causes inflation and is a tax on the economy.

The US economy was absolutely fucked for a large portion of that time period largely because of the lack of monetary policy. The economy has done much, much better since we introduced fiat.

Milton Friedman in "Monetary History of the United States" shows that fluctuations in the money supply were significantly more pronounced after fiat money began. The fed's enlightened hand on the tiller simply isn't as good as the blind actions of the free market.

fluctuations in the money supply are not necessarily a bad thing.

If they have proved unable at smoothing the small fluctuations, how can they do better with the large ones? And they didn't - the Great Depression.

>The US economy had zero net inflation from 1800 to 1914. No death spiral.

I've heard that £1 was worth the same in 1914 as in 1614.

Even with the prices of commodities falling, stock prices can still rise, and as long as this is higher than the deflationary rate, investing still beats hoarding.