Quote:
Originally Posted by Rainger99
If a river is within its banks on day 1 and is 10 feet above flood stage on day 2 and is 12 feet above flood stage on day 3, and 13 feet above flood stage on day 4, would you say that the water has gone down?
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Inflation is the rate of change of prices, a comparison of price levels at different times.
In your example, Inflation is the rate of change of flooding, not the level of the water. In your example the inflation (water rising rate) has gone down. The water level does not go down until the rate of change goes negative.
Only deflation, negative price changes, will result in price levels going down.
There are many, many economic reasons why deflation is avoided at all costs.
There are also many unintended consequences of near zero inflation, which in the long term, is not good for everyone in today's world.
Normal inflation is within the 3-5% range, and so today is more about normalization than recent history has provided, which is an exception. .