The theory is that if prices are going down people will just delay their purchases waiting for better prices, so in aggregate they'll consume less, though this of course only applies to things people don't actually need immediately, so food prices or rents going down would have no such effect.

People not consuming as much is bad for a Consumer Society. However, one should ponder further on whether the Consumer Society itself is a good thing or a bad thing, especially in light of the Ecological damage its doing, that the infinity growth of Revenue it aims for is Mathematically impossible and that what it's mostly achieving in the era of automation is to move more and more of the resources into the hands of fewer and fewer people.

Maybe people being desincentivised from buying on impulse lots of things they don't need would be a good thing, even if the Owner Class would be unhappy for not making as many billions.