Deflation != deflationary spiral The deflation has to be severe enough to cause people to substantially change their behavior. Suggesting that deflation alway

Deflation != deflationary spiral The deflation has to be severe enough to cause people to substantially change their behavior. Suggesting that deflation always leads to a deflationary spiral (which you implicitly did) doesn't hold. Remember, wages are sticky so people aren't necessarily going to be making less money, just that stuff will be cheaper. As things get cheaper, it's possible that sales volumes will go up (econ 101). That could then offset any reduction is gross profit, if there is any. There may well not be, because the reduction in the output price might simply be from the reduction in the material input price. Massive deflationary shocks cause a lot of problems. But how do you get deflationary shocks? By trying desperately to pretend deflation isn't happening for many years, and then eventually the market stops believing you (you being the central banker) and prices adjust to a more realistic level. Perhaps the folks who are trying like mad to prevent a mild deflation are in fact the cause of the deflationary spiral that's a problem. Perhaps in their absence we'd just have mild deflation that doesn't cause the whole world to blow up all at once.