We usually think of it as a plus. Now, suppose you are in a balance sheet recession -- Japan in 1990, Europe now -- and you have a pile of nominal debt over-hanging, call it B. With too much price flexibility, the slump pushes prices very low, B/P increases a lot, and the real burden of debt goes thr the roof. This accentuates the logic behind the balance sheet recession...!
Quantitative Easing in Europe
People in the real world love QE. Does it really boost demand in the short run? More money, M, in the economy pushes asset prices higher very fast, particularly the price of houses. Now, since renters are usually poorer than owners and have greater marginal propensities to consume in the short run, higher rental rates and prices, by redistributing money from renters to owners adversely affect agreggate demand. What if this channel trumps the others??