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I don't understand how the situation above is a 'quirk' and not a straightforward example of deflation. The price of a typical TV - now represented in the basket of goods as a 32in TV - has fallen.

The fact that lower prices might lead people to buy larger TVs is no more surprising than a fall in the price of meat leading people to buy more steak.

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The price is the same, it has not fallen.

You get a bigger TV for the same price but this is not the same thing as a lower price for the same TV, which is what most people would recognise as lower inflation.

That's why I said it was a quirk

The price of a 32in TV has presumably gone down though right? And the same would surely be true of a 29in TV if you could find one. The fact that the market has moved on and you have to tweak your basket of goods is a measurement quirk, not a definition issue.

It's not very different to finding out you can buy a 12-pack for as much as a 6-pack used to cost. Also deflation.

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