Perhaps there is no real disagreement. What we have here are four concepts masquerading as two. Let's start with <i>inflation</i>, a rise in prices, and <i>deflation</i>, a fall in prices, and introduce the two missing words: <i>expansion</i>, an increase in the money supply, and <i>contraction</i>, a decrease in the money supply.<p>Now, expansion causes inflation, and contraction causes deflation. Both have harmful effects. But inflation doesn't imply expansion, and deflation doesn't imply contraction. By themselves, inflation and deflation aren't necessarily bad.<p>With a fixed currency supply, there is neither expansion nor contraction, by definition. Thus, in this case inflation and deflation simply reflect changes in supply, demand, or both. In particular, a rise in the demand for money increases its price (i.e., purchasing power) relative to other goods, which causes lower prices. If you think lower prices are necessarily a problem, I have a $50,000 computer to sell you. :-)