If we could have negative interest rates, deflation would still happen, and people would still label it as a harbinger of bad economic times. Why? Because price

If we could have negative interest rates, deflation would still happen, and people would still label it as a harbinger of bad economic times. Why? Because price deflation of a monetarily inflating currency is a symptom of an unhealthy economy. When the currency becomes a more attractive place to keep your money, it means the rest of the economy has become significantly less attractive - ie unhealthy. Deflation itself isn't what's a big deal, its the cause of deflation that is a big deal. > The bias towards inflation exists because it can reduce the real interest rate below 0% And why would we want such a thing? With real interest rates below 0, everyone could take a loan out, sit around and do nothing, and then collect money from the "lender" later.