The Importance of Time Preference in Economics

The notion that prices dropping will stop people from spending only really applies to frivolous spending. You're not going to starve today just because you can get more food tomorrow right? At some level you need to survive. People save if you don't spend. The opportunity cost of saving is that you forgo consumption and the opportunity cost of consumption is saving. So harder money leads to more saving, more saving leads to more capital accumulation. This leads to higher productivity, leads to better material living standards. It's effectively the process of civilization. We started accumulating doodable things because we could think far longer. And this is how we moved away from being monkeys living in the jungle. In other words