[dcolkitt]

This is common folk wisdom, but not exactly what macroeconomists actually believe. It's true that deflationary shocks tend to lead to hoarding money and economic activity freezing. But long-run deflation that's baked into the system and expected appears to have no impact on economic activity.

We know this from the economic history of the 19th century. The entire period from 1815-1914 was broadly deflationary, yet economic growth rates were significantly higher than the 20th century. There was certainly no shortage of massive investment made into industrialization, railroads, electrification, and fossil fuels among other major endeavors.

https://www.nber.org/digest/apr04/good-versus-bad-deflation-...