In the fall of 2008, the financial markets suffered a major crisis that led to a large decrease in the willingness of banks and other financial institutions to lend either to each other or to consumers and businesses. Because much of the investment in capital in the United States is financed by borrowing and many businesses were unable to borrow, during this time, the capital stock decreased as worn-out capital was not replaced.

What is the effect on the rate of inflation from this reduction in capital stock assuming a prerecession level of aggregate demand?