Yes, a slight deflation is a good thing. High deflation, on the other hand, is even more pernicious than high inflation, which is why central bankers choose hyperinflation over strong deflation in the event of a financial crisis. But small amounts of inflation are corrosive to both the financial well-being and moral character. Inflation is the handmaiden of the “twilight of authority”.
But small amounts of deflation (<3% per annum) ensure fiscal probity and an emphasis on production over consumption.
How'd that work out for Japan in the 90s?
But small amounts of deflation (<3% per annum) ensure fiscal probity and an emphasis on production over consumption.
If GM had to lower the price of their product 2.5% each year, you think they'd be a stronger company? Would any company expand production if there was 2.5% annual deflation? How many houses would be built or bought each year if the prices dropped 2.5% every year?