Imagine wages and factor prices are stable. Hence deflation means productivity growth: Higher quantities bought for a lower price. Low inflation or even deflation is the Swiss success story for decades and the success story for the United States recently. The Pigou effect seems to be saving the US economy, just as it did in the 1980s.
Just avoid wage deflation and therefore a deflationary spiral and you are fine.
Highly Recommended: Adam Smith Institute
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Tags: Adam Smith,Deflation,Pigou effect