At least, that is so provided that the drop is temporary, and that expectations about future price changes remain well-anchored at a bit above zero. But what happens when expectations about ongoing deflation take hold? That is different.
Winston Dookeran: The state of the economy in Trinidad and Tobago and the outlook for 2001 Address by Mr Winston Dookeran, Governor of the Central Bank of Trinidad and Tobago, to the Trinidad and Tobago Chamber of Industry and Commerce, 16 May 2001.