I cannot remember it exactly, but there is the analogy of flying a kite that is helpful to understanding the inflation that developed economies are targeting and why they are having trouble getting it.
First of all, to launch a kite you need some wind. You toss it up into the air. The wind starts to take it. You tug on the string to stop it getting away on you. However, what you find is that by tugging on string and then letting it go and then tugging again, you can get the kite to go high and higher.
Suddenly, the wind stops for whatever reason and the kite starts to fall back to earth. One thing you can do is to run with the kite, making up for the lost wind, but that takes a lot of effort and can only be done for a short time.
The point is, you need wind, and what it equates to in economic terms. Because of that inflationary pressure, the central banks job was to raise and lower rates, stop the kite from flying away and provide the tugging action, hopefully leading to steady inflation. The sign of a 'good' economy.
However, the wind has weakened for various reasons. Eventhough the Bank of Japan, for example, knew that trying to run with the kite and artificially pumping up prices was a waste of time, the new government changed the laws to force them to try and get 2% inflation.
They still haven't go it. Of course, they got asset inflation, but that is not the right one as it only benefits the wealthy minority. They keep talking up inflation and trying to create the idea that people need to start buying now, but the fact is the people who make up the majority of the economy, the workers, are clean out of money.
Basically, what used to be the middle class has been gutted out making way for the have and have nots. Loosely defined as those who have lost out to technological progress and those that have made money from it.
Super easy credit = over investment = technological progress = cheaper products = disenfranchised workers = lower wages = demand for lower prices = even more investment. This type of environment is quite deflationary.
Ironically, America's solution to the GFC is/was the cause.
