Anonymous
Favorite Answer
Deflation. When consumers' confidence is down, people will stop buying. Inventories increase. Producers have to decrease price, and reduce new investment, the devil goes further downward. It's an vicious circle.
Aleconomixt
CPI decline can be best stimulated by raising interest rates and taxes, also by decreasing wages .
Less money in hands of people and lure of high gains of investing makes them spend less.
So, demand decreases and prices come down.