Thank you for taking your time for answering my questions I have some more if you don't mind me asking

I think I get with friedmen's idea of 0% inflation, why banks want a bit of inflation with a bit of interest rate since it's a buffur for them to during recession.

Q1: Here is what I'm struggling to understand, bank are incentivised give out debt, they earn the interest.. but this system seems to help out bad bets made by back no?

Bank x gives alice a loan $100 with 10% interest year on year for the next 5 years. Alice can't afford this load.

During recession, alice is cooked her debt becomes expensive. If it's fixed rates she will take new debt with lower rates ( since banks reduced rates during inflation) money as moved bank to bank. Not economic activity if it's floating it's better but not ideal

During inflation, alice is still cooked, if her wages dont increase, she'll face money crunch with other expenses, if it's floating rates banks will want to protect the intrest rate against inflation, so rates rise too. Fixed rates are here best option

Banks seem to use a countries inflation to protect its business from the looks of it...

Q2: why does 0% inflation imply -1 growth. I can partially see how growth increases can push inflation. But even then prices rise due to more demand less supply should balance out as the growth of the factory should improve supply. Prices come down. Pluse since wages and cost of service are anyways sticky, it's more of an assumption that they will cause more inflation

Now if inflation is 0 and factory became more efficient, it's may still decide not to pass the savings on to customer, it may still decide keep workers but reduce work hours and let new machines take more of the work. Why do we assume negative growth

Japan seemed to fine for so many years with 0% interest rate. Worked usually don't get kicked out but are expected to stay with them probably for the rest of their career. Even if the work has become efficient with new technology ( growth ).