If people aren’t getting jobs and raises and buying extra things, there will be no upward pressure on demand. Not having inflation is not necessarily a good thing.
Please reread your Milton Friedman. His fundamental thesis is now regarded as law by all economists, even Keynesians. See here, for one example among many: http://www.nber.org/papers/w1453
Inflation is ALWAYS a function of MONETARY POLICY -- Milton Friedman.
Put the pointy hat on and go sit on the stool in the corner until you commit that to heart. Increasing demand pressure does NOT have to create inflation. Increasing productivity does NOT have to cause deflation. A sound monetary policy keeps both of those pressures in check without [do I have to say it?] inflation.