Inflation: temporary relief

Banks are pulling back on lending, jobs are scarce and commodity prices are tumbling. It might seem that inflation is no longer a problem. True, but only for a while. Consumer prices are no longer rising. In the US in the past two months, they have been flat. There’s more non-inflation to come as sharply lower commodity prices work their way through the economy. Indeed, taking the declines in house and other asset prices into account, total price levels are probably falling in the US. The story...