Human beings don't like to lower wages and prices. Also known as 'sticky wages': https://en.wikipedia.org/wiki/Nominal_rigidity https://en.wikipedia.org/wiki/No

Human beings don't like to lower wages and prices. Also known as 'sticky wages': https://en.wikipedia.org/wiki/Nominal_rigidity https://en.wikipedia.org/wiki/Nominal_rigidity There is plenty of debate over how much this matters, under what conditions it is true, and how the mechanism works. Nonetheless, there is consensus that human bias against lowering prices prevents price deflation and helps cause recessions. This is one reason why some economists think that steady inflation or NGDP growth is good. If prices always rise, then instead of lowering them (which is psychologically hard), you can just hold them flat for the same effect.