Technological progress makes products more efficient and cheaper, which has a deflationary effect. To keep the 2% inflation target, more and more money needs to be printed, increasing wealth inequality. The faster efficiency increases, the harder it becomes to artificially create inflation. With AI accelerating technological progress even further, the problem grows. This could lead to a deflationary problem—a risk to our system? Can this system work in the long term?

#AI #technology #inflation