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Generally speaking, lower prices are better. Not an economist, but I believe that statement needs to be indexed to inflation/deflation. Lower prices relative t
by sliverstorm 9y ago
Generally speaking, lower prices are better.
Not an economist, but I believe that statement needs to be indexed to inflation/deflation. Lower prices relative to income, in other words higher purchasing power, is good. But you can't inflate/deflate your way to lower real production costs or higher wages.
prices of computers and electronics are always dropping due to technology improvements
Right, the electronics market is in some senses an example of the behavior of a deflationary market, but it is also different than prices dropping due to financial wizardry.
Would you prefer the alternative, that technology improvements stop
In many parts of the market, improvements have stopped. Continuing improvement is clearly best, but not always an option. A gallon of milk or a shovel isn't getting any better next year. So what then?
- skybrian 9y agoYes, I agree, lower prices are better except for wages. If most prices go down and wages stay the same, that's measured as an increase in productivity. Technology hasn't stopped in agriculture. For example, there are automatic milking machines [1], and there's a well-funded startup that wants to grow lettuce in warehouses built near distribution centers [2]. I wouldn't expect the price of milk to change much in the short term. In the long run, who knows? Maybe biotech improvements will mean we don't need cows? [1] https://www.nytimes.com/2014/04/23/nyregion/with-farm-robotics-the-cows-decide-when-its-milking-time.html?_r=0 https://www.nytimes.com/2014/04/23/nyregion/with-farm-roboti... [2] https://www.bloomberg.com/news/features/2017-09-06/this-high-tech-vertical-farm-promises-whole-foods-quality-at-walmart-prices https://www.bloomberg.com/news/features/2017-09-06/this-high...