New Delhi, Aug. 17 -- One of the more complex concepts in economics is inflation, even though it simply refers to an increase in prices. When we say inflation has come down from, say, 6% to 2%, it means the rate of change of prices has come down. But prices are still going up. If prices fell across the board, it would reduce the incentive of producers to produce goods and services.

The interpretation of inflation, however, has had a distinct touch of malleability. Of late, there has been a tendency to argue that inflation is up only because of certain goods and services, excluding which would make the number less bothersome.

However, the same argument is not put forth when inflation declines. A sharp fall in prices of pulses or vegetabl...