A more specific question might lead to a better discussion: If the economy-wide goal[0] is increasing wealth[1], then why are increasing prices better than fla

A more specific question might lead to a better discussion: If the economy-wide goal[0] is increasing wealth[1], then why are increasing prices better than flat or decreasing prices[2]? [0] There is general consensus that stable economic growth is our macroeconomic goal, generally defined as increasing output per person, or GDP. [1] Generally in economics this is taken to mean real purchasing power. [2] An increasing money supply is a side effect of the real goal of central banks: small amounts of inflation. If a population were shrinking, or if output was contracting, it might well mean that the money supply could remain flat or decrease and there might still be inflation. But as the population grows, the money supply must increase not just to keep prices flat but to encourage slight inflation. Keynes writes brilliantly on this topic in "Essays on Persuasion," and many of the points are addressed here in the comments. But it can generally be distilled into three main points: A low level of inflation 1) compels business activity because businesspeople can sell things at a higher price than they paid for all of the inputs; 2) compels consumer spending because today is the most valuable your cash will ever be; and 3) compels lending because there is a cost to simply doing nothing with cash. Without those incentives, there would be a severe pull-back in lending, spending, and business and job creation, which are the same deflationary forces fought in the 2008 financial crash.