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can you link data for this? i think productivity has been growing far slower than the money supply in the US (~1-5% vs. ~8%) for a while

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I was refering to the techonlogy sector. Prices have been persistently falling and this is reinforced by new innovation because old products lose monetary value very quickly. If productivity was growing slower than monetary expansion prices definitely would not be falling at the rate they have been in this sector.

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i haven't studied this so i'm not sure about it.

i think innovation not productivity caused the fall in prices as old products become obsolete so quickly in the tech sector that prices are forced to fall in order to keep up sales.

productivity is labor hours to produce goods. innovation is increased quality of goods. innovation makes previously produced goods much less attractive and reduces the demand for them. this reduced demand mandates price reductions in order to keep up sales.

i'm not 100% sure of these definitions as productivity may be measured in per unit of memory or something like that in which case it is obviously increasing, but if not, then the above case definitely holds.

further, i don't think money supply is a good measure within individual sectors.

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the point about productivity though is a good one and i should restate that the money supply should grow by the economic trend growth rate minus the trend growthrate of productivity.

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This im fine with. Any extra savings should allow for increasing investment.

The money supply being fixed has similar effects though. The growth of the money supply just occurs internally rather than externally. This happnes through the subdivision of previous wealth to include new wealth but each monetary unit retains a greater value than before.

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what? can you rephrase that b/c i don't think i understand that last part.

thanks,
Barron