Many economists argue that a deflationary economy is a disaster that should be avoided at all costs. That is because in a period of rapid deflation, people tend to hoard money instead of spending it, hoping that prices will fall. Such a phenomenon unfolded during Japan's "Lost Decade," when a complete collapse of demand pushed the currency into a deflationary spiral.
The "Lost Decade" was the result of a huge speculative bubble in Japans. It was very similar to the 2006-2008 housing bubble in the U.S. that led to the 2008 Financial Crisis, but it was much more pervasive.
The deflation experienced after the "Lost Decade" was a
result of the collapse. It was not the
cause of the collapse. There was no deflationary spiral.
Furthermore, Japan has been experiencing deflation for decades now. So, if deflation is such a disaster, you would think that the people of Japan would be suffering horribly. But they aren't.