During a period of inflation prices rise or manufacturers adjust amounts of product consumers get for their money with “shrinkflation”.
After that period ends what happens to prices? Do they drop or do they just continue to increase at a rate closer to the “normal” rate of inflation and never really go back down?
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Inflation rates per country in the G20, over the past two years, has been almost directly proportional to the amount of money printed by the government.
The answer is that deflation is rare, so inflation “normalizes” to a lower rate. Price fluctuations are driven by supply and demand in the short term, but over the long term inflation drives the price of production upward, which raises the demand curve to meet it.
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