I’d think that Central Bank (CB) deflation would be a little bit less harmful than inflation. For these reasons:
Does CB deflation cause a Bust/Boom cycle?
The process transfers wealth from borrowers to savers. The retired are helped. Those that are lucky enough to keep their jobs are helped, as wages trail the general price level. However, as prices fall, if wages are inflexible, due to unions for example, we would expect more unemployment. So CB deflation is worse if wages can’t drop. Would this second round of layoffs hit the medium term sectors the hardest?
In the case of CB inflation the boom is followed by a bust, and the economy drops below trend. In the case of CB deflation, would the bust be followed by a boom, with the economy rebounding above trend? It seems likely, as the rebound could trigger a spending spree. In this case, the medium term projects would seem to be well placed to supply the demand.