The price staircase moves downward, rather than merely climbing more slowly.
01
Go deeper
One discounted product is not economy-wide deflation. Broad price declines can increase the purchasing power of money but also increase the real burden of fixed nominal debt and accompany weak demand.
02
Make it concrete
Hypothetical illustration. Hypothetically, a representative basket falls from $100 to $98: a 2% price decline over the comparison period.
03
When you read a headline
Distinguish a broad price-level decline from slower positive inflation or a single falling price.