Quote:
Originally Posted by 350 mag
Central bankers have another term for technology disruption — deflation. Deflation is when aggregate prices go down over time. Technology can deflate our economy in three ways:
When demand for an existing product is reduced, leading to lower prices;
Example: Netflix put Blockbuster Video Rentals out of business.
When new efficiencies are found and supply is increased, leading to lower prices and;
When both happen, perhaps the most disruptive version of deflation.
Essentially, technology is by definition deflationary. The sharing economy makes it worse. VC and former entrepreneur Mark Suster summarizes some of the better examples of successful startups that have disrupted and deflated parts of the economy, including Amazon, Google and Skype.
https://www.geekwire.com/2015/deflat...act-money/amp/ |
I really don’t agree with that article at all. Do they understand that deflation leads to depressions? They seem to be trying to mix economics with socialism and such. Disruptive technologies don’t always lead to deflation either. With Henry Ford putting an automobile into the hands of the average man it actually was a giant boost to the economy. Not an event causing deflation.
I can definitely see how crypto currencies can be hard on the banking industry. That however is not deflationary. If it takes more money out of the hands of a corporation and gives it to the people, the people have more to spend. If more people have more to spend then people make more money. If people make more money, they once again spend more. That is an inflationary cycle.