Are today’s crop better players? 
  Or like the economy, are Elo ratings subject to bouts of inflation?

Players leaving the system is one of the major sources of rating inflation in chess. Even when rating changes of any single game is zero-sum, if a player stops playing chess after a career of net losses, all the remaining players in the world have more rating to divide up amongst themselves.

This is very obvious on FICS bughouse where new sock puppet accounts crop up all the time, net lose several games, and then leave forever.

Part of the problem is new players are usually given a starting rating around 1600 (depends on their provisional games), a "median" ranking of sorts, but in reality a new player is often far worse and donates rating as they slide down to their correct rating.