2/7/12

Information technology - the leader of deflation

Yesterday I missed the absolute hero of deflation in the US – the consumer price index of information technology, hardware and software (see Figure 1). It has been falling since 1991 and now levels at 9 points relative to 226 points of the headline CPI. This is a fascinating behavior of the most important modern goods and services. Computers and information is the core of real economic growth.


Figure 1. The evolution of the headline CPI and the index of information technology, hardware and software.

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