Historic Drivers of Inflation Deflation

[Packer16]

Has anyone read The Great Wave: Price Revolutions and the Rythm of History?  It provides some good insight into the history of prices what drives them and thier relation to demogrphics.  Its thesis is that we are at the end of a price revolution and the future will be more deflationary than inflationary due to demographics.

 

Historically, price revolutions have not ended well (the last one ended in the French Revolution and the Napoleanic Wars).  However, some of the causes of the revolutions have been removed (progressive taxation which has provided for lower incomes some of the wealth generated from the top and the depedence of large portions of the the economy of agriculture and weather).  However, some of his observations may be telling.  In the periods of price revolutions, the holders of capital assets (land and money) do well versus labor.  However, in times of price stabilty the opposite occurs (labor - real wages increase) and land and money decreases in value.  At the end of the price revolutions there is a lag where wealth inequality increase for a while then it becomes more stable as labor gets a larger piece of the pie. 

 

Interesting reading and falls in place with FFH's thinking.

 

Packer