There doesn't need to be deflation. As long as the real return on cash (around -2% when interest rates are zero) is higher than market safe return on investment (which can be lower than -2%) it can cause a gridlock in the investment market.
>If you're expanding production every year and you see the added revenue only the year after it's not difficult to see how inflation would have a negative impact (even if constant!).
I don't follow at all. Inflation means prices are rising with time. So the investment early in time is made when prices are lower and the revenues are made later when prices are higher and thus you make higher revenues relative to what you paid for your investment. Inflation helps you here!
Insufficient inflation would be the problem. You make your investment when prices are high so you pay a lot, then when it comes to sell your product you get a insufficiently high price and low profit.
It's all part of the cost of capital calculation: https://en.wikipedia.org/wiki/Cost_of_capital