LAW OF PRICES...

In Economics we say that prices should be such to clear the market.  Inflation targeting may be of less use because we should let the prices become market clearing. When we choose inflation targeting we do not let prices go below the prices in the base year which means we have set a limit for compression of prices and if it goes below that it is a deflation. But, deflation is a good-thing because it decreases prices which are good for competitive devaluation. What we try to achieve by depreciation? More demand, less prices relative to the money-supply and more exports. We gamble on other people's income. There should be a "LAW OF PRICES”, too, means "less price more demand and more prices less demand" And, a product's demand is largely determined by its prices. How many people can afford it and lower prices will attract more buyers. You can earn your long term profit in the short run if we reach a wider population by keeping prices low. It is called scale-economies. When prices go down it is a moment of relief and we should welcome it by floating a lower redenomination. But by redenomination i mean the difference between paisa and rupee. When we move from rupee to paisa it is a lower redenomination and if we move from paisa to rupee it is a higher redenomination. The central bank commits that the value of money must be increasing and not decreasing. But what generally happens a Rupee looses some of its value every year...