/biz/ - Business & Finance

I was told that inflation is good for the economy because it creates money velocity while deflation is bad because it reduces it. However, inflation clearly transfers wealth upwards - the wealthier and better-invested you are the more inflation favors you.

Would a deflationary monetary policy not do the opposite? Would it not transfer wealth back down to lower classes who save while the value of the currency rises thus stimulating more frivolous spending from the top?

I admit that I might be an retard.