RE: The Laws Of Information Technology And Deflation

but I really do think inflation is the most likely scenario in the coming years.

Depends upon what period you are discussing. Overall, certainly, in the next 5 years you will might not see much difference from the historical norm.

But when we look at technological deflation, it is penetrating throughout more of the industry.

but I would guess the average price for mobile devices is more expensive now than in 1997

So you are trying to compare a smartphone? Even still, the answer is no. This compares high end phones. There are obviously non Samsung and Apple phones that are much cheaper. My latest phone costs about $220.

families spend more on communication technology now than in 1997. So yes, the technology is deflationary but companies have found ways to offer more to charge more.

How so? The data reflects the costs of those services are going down. So what are you talking about in particular?

Of course, technology will eliminate the labor factor. It is why companies can offer stock trades for free. There are no people involved in the transaction anymore. The brokers are gone since we do the trade online and the traders on the floor of the exchanges were automated.

Your phone might be $220, but I'd say on average people are spending just as much on devices as in the late 90s. Even with your graph you can see the iPhone X is about the same price as the Motorola and Nokia. Obviously the iPhone X can do way, way, way more than those phones and has significantly better hardware and features... but my point is that normal people aren't seeing those technological deflationary savings because companies find a way to keep prices high... which helps inflation.

At the moment my household pays $95 a month for cell service through Verizon. This is the cheapest package they offer. We're in an area where we can only get Verizon. AT&T and T-Mobile don't provide coverage here. So even though the costs of individual calls is cheaper, data is cheaper, I don't think people on average aren't paying significantly less than they were in the late 90s. The prices haven't been deflationary even if the cost of the technology has been.

Sure... stock trading has reduced in cost... but so many more things are more expensive than they were.. housing, education, healthcare, cost of living, etc. I'm finding it hard to think that these things will be dramatically cheaper in 10 years. They'll surely be more profitable, absolutely, but they won't be cheaper.