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Comment by pmorici | Hacker News Reader

Efficiency gains from technology advances in past 20 years have masked inflation. Look at industries like houses, healthcare, and education which tech hasn’t optimized to the same extent and you see massive inflation

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Inflation, using the usual definition, cannot be 'masked by technology' as technology is one of the things that legitimately determine general price level. Inflation counts and always counted general price level with effects of technology advancements taken into account. So the poster you are replying to has it right: inflation is low.

I think the argument is that technology "should have" led to a massive deflation as the price of a bunch of goods and services crashed due to automation; but, instead, that value has been being captured by a combination of people "at the top" simply making more money (hiring fewer people but keeping prices the same somehow, maybe due to supply chain oligopolies or intellectual property barriers <- this is all ancillary to the point, btw, and yet the point doesn't feel complete or honest if I don't add this first effect) and the levers that can be used to cause inflation (which I think are what people are really talking about here when they say "inflation": not the measurable result, but a specific set of deliberate causes of an upward force--whether or not the sum of all forces, in total, is up--on that measurement), the latter of which then leading to an "on average" leveling of the inflation measure where the price of things that can be automated goes down slightly (instead of dramatically) while the price of things that can't be automated goes up.

I agree that technology advances would have lead to massive deflation without all the money printing. The point of money printing is to do precisely this, so that the measure of economy does not get out of sync with the size of the economy. https://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/... is a great book that touches the topic -- it also shows this discussion is not new.

I also agree that the chosen transmission mechanism of money creation (buying bonds and stocks by central banks) might have lead to worsening inequality. I like the Yudkowsky treatment at https://www.lesswrong.com/posts/tAThqgpJwSueqhvKM/frequently... .

But I still think that the inflation is low and if we want to describe the problems that are happening even though it's low, we should create new language, not shift the current one.

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