A quick puzzle: say that gas prices hit a record high in nominal dollars. And say they also, around the same time, hit a record high in real (inflation-adjusted) dollars. Which comes first?
Say the nominal price is f(t) and the real price is h(t) = f(t)g(t), where g is monotone decreasing. Then h'(t) = f'(t) g(t) + f(t) g'(t). So if the nominal price is at a maximum at time T, then f'(T) = 0 and so h'(T) = f(T) g'(T). f(T) is positive because it's a price and g'(T) is negative by assumption. So h'(T) is negative and at the time of the nominal high, the real price is already decreasing. The real high comes first, and there's a short period in which the real price is decreasing but the nominal price is still increasing. This makes sense - a nominally constant price is decreasing in real dollars.
This is brought to you by an example from Geoff Nunberg's book Talking Right, on how the Right has distorted political language in the United States in an effort to marginalize the Left. At the particular point I'm commenting on, argues that the right likes to proclaim "record highs" in gas prices which are basically always in nominal dollars and therefore make the gas price rise look worse than it is. My argument, however, says nothing about that - taking derivatives makes this a local problem, and "record highs" (nominal or real) are global maxima.