Declining prices under stable inflation challenge economic norms and expectations.
The study looked at how prices change when overall prices stay stable. They used data from Finland's Consumer Price Index over eight and a half years with very low inflation. They found that even with stable prices, some prices went down. This wasn't because people weren't buying things or prices were dropping overall. The study showed that prices can still adjust even when overall prices stay the same. They also found that the way prices change doesn't really relate to how much prices are going up or down overall. Instead, it's more about how prices are spread out. Overall, the study suggests that a lot of price changes were lasting, which means they were likely due to changes in how things are made or other factors affecting supply.