Why Are Negative Interest Rates A Bad Thing?
While nobody wants skyrocketing inflation, Economists seem to agree that mild inflation is acceptable. However, there also seems to be a near universal belief that even mild deflation is a horrible phenomenon. I can't grasp why this is the case, other than the psychological effects of "self-fulfilling prophecy". If dollars are worth slightly more today then they are a month from now, won't that trigger demand/consumption? Won't that increased demand reduce unemployment and increase businesses spending/short-term investment? Please help me understand where I have gone wrong.