Why is in flation preferable to deflation? I appreciate this is largely due to the fact that deflation causes a large decrease in demand as people continually wait for prices to decrease, but if anyone has finer points I would be grateful.
I wouldn't necessarily agree that inflation is universally preferable to deflation. Each has positive and negative consequences. Inflation hurts savers, deflation hurts current consumers. A little inflation (let's say, 2% per year) is useful -- if nothing else, it helps deal with wage stickiness. Deflation, on the other hand, would be a godsend for a country like Venezuela where prices have been growing incessantly.
This is all to say that there isn't a single rule for inflation vs deflation. The broader economic context is critical.