I don’t understand. You said earlier that entrepreneurs tend to layoff workers. And you think they don’t want to hire them again. And now you say : “Hazlitt in his book about inflation convinced me that deflation is never really a problem”
Entrepeneurs tend to lay off workers during a recessio, or when one business falls upon hard times.
But deflation doesn’t cause recessions or hard times for a business.
http://econospeak.blogspot.com/2010/11/does-1920-21-recession-really-prove.html
It was indeed an odd recession, with 1920 being the year of maximum demobilization of troops from WW I putting pressure on the labor market, and with a series of inventory adjustments from the end of the war also hitting. This led to the largest one year decline in the price level in US history, somewhere between 13 and 18%, depending on one’s source. But in contrast to the story that gets handed out, there was no comparable decline in wages, according to the one source I could find, the National Industrial Conference Board. Wages rose slightly, and did so again in 1921, the worst year of the recession, when the unemployment rate peaked in July of that year. It is true that finally in 1922, wages fell by 8% before returning to rising in the following year, but the turnaround had come already in late 1921.
I’m a little confused. Is it true that wages haven’t declined during the recession of 1921?