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> I have trouble viewing this as traditional “deflation” but don’t have the expertise to really understand it. If there is a technological revolution like in th

> I have trouble viewing this as traditional “deflation” but don’t have the expertise to really understand it. If there is a technological revolution like in the period quoted above, then prices may fall due to things like efficient production. I think the standard argument for the importance of inflation is focused at least somewhat on the supply side (governments add to the supply to stimulate the economy by devaluing money which people hold). The theory is that the increasing supply disincentives people from just letting their money sit stagnant. Falling prices due to technical innovations may have a somewhat similar effect (people may hold off on buying a computer if they think the same computer will be 30% cheaper next year) but I think when the cost of things is "too damn high", that deflation can also stimulate purchases. > > Who benefits from continued inflation? Well, the political and business elites. The biggest debtor in our economies is the state. Also many business elites are highly indebted. They would lose out in a scenario with price deflation. > It seems like the simplest explanation - this view point in favor of inflation is pushed because there are people who stand to benefit greatly from those conditions. Or is that too cynical? I'm not entirely sure I agree with this though, at least on the pricing side. When supplies and labor costs more, business operating expenses go up a lot, and the working class demands higher wages (at least in theory). So I think it really depends what is costing less vs costing more. The best case scenario for reducing wealth inequality I think would be labor costs going up while rents, real estate, and consumer goods get cheaper. I'm not sure how this would fare when measured against economic goalposts like GDP though.

lurking15 3y ago
> The theory is that the increasing supply disincentives people from just letting their money sit stagnant I've always found this hypocritical in some way, since Keynesians and other Great Society/New Deal types are now generally very pro-environment and supposedly anti-consumerism. So we're now in a situation where funny enough standard economics (which we're told is brain dead to oppose) would be exactly pro-consumerism and anti-environment just based on the idea of it incentivizing people to "not let money sit idle". It's clear to me that they're now faced with a problem being so pro-consumerism - they have to control the consumer through ever increasing regulation and surveillance.

lurking15 3y ago

> The theory is that the increasing supply disincentives people from just letting their money sit stagnant I've always found this hypocritical in some way, since Keynesians and other Great Society/New Deal types are now generally very pro-environment and supposedly anti-consumerism. So we're now in a situation where funny enough standard economics (which we're told is brain dead to oppose) would be exactly pro-consumerism and anti-environment just based on the idea of it incentivizing people to "not let money sit idle". It's clear to me that they're now faced with a problem being so pro-consumerism - they have to control the consumer through ever increasing regulation and surveillance.