Prices only remain flat (0% inflation) if no increase in productivity occurs. 2% inflation doesn't mean the currency has been debased by 2%, it means: if it ha

Prices only remain flat (0% inflation) if no increase in productivity occurs. 2% inflation doesn't mean the currency has been debased by 2%, it means: if it has become x% cheaper to produce a basket of goods -- and the price of this basket of goods has increased by 2% -- the currency has been devalued by (2+x)%. Producers are constantly competing to cut the costs of production, in order to gain market share at the expense of competitors, so I don't see how flat prices can be a reasonable assumption.