Do price drops imply wage drops as companies seek to remain competitive, particularly since energy costs may rise, whilst Chinese labour costs remain below ours?
Here's a paper on the Japanese deflation of the 90s, from the BIS. It's pretty technical, so I don't know if there are any useful insights there...
http://www.bis.org/publ/work188.pdf In the long run, we're all dead. John Maynard Keynes
