It's a valid question to ask, but neither of us knows how analogous the electronics industry is to the economy as a whole for the purpose of modeling a deflationary spiral.

If my money becomes worth more in a given sector precisely when that sector becomes more productive, that seems to work fine.

Maybe if every sector were guaranteed to follow its own equivalent of Moore's law and everyone knew that, then a fixed currency supply and a fixed deflation rate could still support an economy with high velocity of money.

But if the productivity of one sector automatically makes my money worth more in *every* sector, even sectors where nothing has changed, that may lead to a positive feedback loop of slowing down velocity of money.

I think it's the kind of question where people need to propose more detailed models and computer simulations.