When they calculate the inflation at 2% are they calculating this with added -+2% yearly productivity gains so in real terms the inflation is 4%? Can someone explain?
When they calculate the inflation at 2% are they calculating this with added -+2% yearly productivity gains so in real terms the inflation is 4%? Can someone explain?
From a sound money perspective, productivity gains should lead to lower prices (deflation) if the money supply is stable. The mainstream practice of targeting 2% inflation does not account for productivity gains in the way austrian economists would advocate
