[nhaehnle]

The rate of inflation has other effects. Prices tend to move upwards more easily than downwards; the most basic reason for this is that when you have a choice between reducing your real income via a general across-the-board inflation, or reducing your real income by cutting your nominal income, you should almost always choose the inflation (because spending is typically dominated by contracts, i.e. fixed cash flows like mortgage payments and utilities bills).

So if you have a choice between (1) x% demurrage and 0% inflation, or (2) 0% demurrage and x% inflation, you should always prefer option (2). This allows prices to adjust faster, which is generally a good thing.