You pose this question but you don’t explore some answers.

In a world where prices don’t increase, or worse, decrease, there would be no incentive for consumers to purchase goods; if the price doesn’t increase, or is decreasing, then why would anyone buy goods now instead of a few months, or years down the road?

You would and do purchase goods who’s price is declining. You purchase them because you want and need them now. You can’t delay purchases of food, clothing or lodging. You need them today and everyday.

Computers and phones get better and cheaper all the time but we still buy them now and don’t wait for the better cheaper ones.

“let’s address the question of why the usual drop in interest rates isn’t prompting inflation. If the answer was clear, we would have two percent inflation currently.”

Understanding a problem does not always result in a solution. Also you don’t have to understand a problem to actually counter act it.

We could easily stimulate inflation. If the government borrowed a lot of money and gave it to people who would spend it instead of saving it, demand for goods would increase and producers could increase prices.

Printing money and increasing spending will produce inflation. Printing money and giving it to banks does not increase spending. It might increase lending but if the borrowed money just goes into stock purchases or gold purchases, etc. it will not stimulate inflation. If you print money and give it to the poor they will spend it, they will create inflation.

TEK