If we experienced the full effect of deflation, then average wages would be falling, as well as the average prices for everything (not just for consumer electro

If we experienced the full effect of deflation, then average wages would be falling, as well as the average prices for everything (not just for consumer electronics, which make up a very small percentage of the average person’s expenditures). This would be particularly bad news for any person or business that carried, or expected to carry, debt. You wouldn’t want to take out a mortgage on a house (or have your company borrow money to build a factory) if you expected that the nominal resale value of the house would go down and your nominal income would go down while your nominal monthly payments would stay fixed.