We hear so much about the perils of deflation that it's worth noting that the computer industry, which has endured massive deflation in the past 30 years, has during that time flourished, benefitting consumers immensely. This picture tells the tale.
According to Wikipedia, these are photos of an Osborne Executive portable computer, from 1982, and an iPhone, released 2007. The Executive weighs 100 times as much, has nearly 500 times the volume, cost 10 times as much, and has a 100th the clock frequency of the iPhone.
It illustrates a basic point, that deflation is often a wonderful thing that coincides with better products and prices for consumers. It is certainly not, as pundits would suggest, a necessarily bad thing.
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