![]() Improvements on top-end cars eventually make their way into every car. More goods produced at less cost should mean falling prices unless demand from population growth more than makes up for productivity gains.įew could afford big flat panel TVs when they first came out. Productivity enhancements are inherently price deflationary. The big problem is central banks insists on inflation in a deflationary world.Įven the BIS says routine price deflation is not damaging (See Historical Perspective on CPI Deflations: How Damaging are They?) The Fed will get productivity, but will the Fed like the result when it comes?Ĭentral Banks Insist on Inflation in Deflationary World The loss of millions of truck driving jobs will be a catastrophe to those who cannot do anything else, but will be a boon to everyone else who pays lower prices. Millions of jobs will vanish by 2024 if not sooner. Productivity Will Rise Again – Will the Fed Like the Result?Īutonomous cars, truck, and buses are coming. A chart from the same article shows the concern. Fed Chair Janet Yellen is very concerned about falling productivity.
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