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Briarstone Network · The Brief
Why Prices Rarely Go Back Down
When inflation slows, people expect prices to fall. But in most economies, they rarely do.
February 27, 20261–2 minEconomics
Composed by Briarstone Network
Briarstone Network · The Brief
When inflation slows, people expect prices to fall. But in most economies, they rarely do.
Composed by Briarstone Network
Summary
Many people confuse slowing inflation with falling prices. Inflation measures the rate of increase, not whether prices decline. Once businesses adjust upward, structural forces make reversals uncommon.
When inflation drops from 8% to 3%, it feels like things should get cheaper. In reality, that only means prices are rising more slowly. The baseline remains higher.
Businesses adjust wages, supplier contracts, and long-term pricing models upward during inflationary periods. Once those costs reset, companies rarely reverse them unless demand collapses.
Inflation cooling is not deflation. A slowing rate of increase still means higher living costs. Real relief usually comes from wage growth, productivity gains, or structural supply improvements, not price rollbacks.
Reference
“Inflation is taxation without legislation.”
— Milton Friedman