Capturing the Deflationary Power of Technology

Posted On Jul 30, 2021 By Addison Wiggin

If you ever wanted to rile up the late Dr. Kurt Richebacher, there was no shortage of things you could ask him about. While it’s impossible to know which aspect of modern finance irked him the most, he seemed particularly venomous towards the idea of hedonic pricing. In the simplest terms possible, hedonic pricing is the government’s practice of manipulating GDP data by giving more weight to technology investments. Generously, the government statisticians want to quantify the cost-savings that newer technologies provide. George Gilder actually does something similar with his time-price theories… and Ray Blanco echoed the same thing in our conversation this week…