Most notably, the prices of audiovisual equipment have declined by 90 per cent over the past 25 years (see below). In the case of consumer durables and audiovisual equipment, technological improvement has clearly been an important factor, but competition in the retail sector has also played a significant role.
Graph 3  One way of illustrating the effect of competition on retail prices is by examining the changing dynamics of exchange rate pass-through. That is, the way that changes in the exchange rate affect price changes for retail items.