My post on deflation yesterday drew another objection from someone else:

You’re ignoring the issue of menu costs. The advantage of price stability–no inflation/no deflation–is that companies don’t have to change their prices all the time.

Not so fast. Say we have an economy with the 0 percent inflation that you think is appropriate, and then an increase in the supply of oil exerts downward pressure on its price and on the price level generally. If the central bank acts to keep deflation from happening, then the price of everything but oil has to go up. So more prices have to change.