If supply of money was fixed, changes in the cost of production across time would be reflected in corresponding changes in prices.

If the cost to produce goods falls due to technological advancements, so would price. Thus deflation is the natural outcome of any healthy economy.

Reply to this note

Please Login to reply.

Discussion

Well said 👍

But we need inflation to drive economic activity!

Or more accurately said, we need inflation to induce unnecessary spending on bullshit things you don’t need or provide value

Indeed!