David Smith starts off his rambling post “GOOD’ DEFLATION BOOSTS GROWTH – WILL IT BRING FORWARD RATE RISES?” thus:
It is easy to get depressed about deflation. Deflation and depression are linked in the mind for good reason. In what economic historians call the first great depression, which lasted from 1873 to 1896, prices fell by a fifth. In the more familiar second great depression, in the 1930s, prices in 1934 were 12% lower than in 1928.
The picture below illustrates the UK and US in 1873-1896 and 1929-1940. It´s a stretch to call 1873-1896 a “Great Depression” in the US or in the UK, although you could call it a “Great Deflation”.
Note that NGDP drives the process in both countries and in the contrast between them.