How the Amazon-Google-Uber effect sets inflation | Mohamed El-Erian

Tech innovations have driven the drift down in prices –
policymakers ignore such forces at their peril

Debates about inflation in advanced economies have changed
remarkably over the past decades. Setting aside (mis)measurement
issues, concerns about debilitatingly high inflation and the
excessive power of bond markets are long gone, and the worry now is
that excessively low inflation may hinder growth.

Moreover, while persistently subdued – and, on
nearly $11tn (£8.7tn)

of global bonds
, negative – interest rates may be causing
resource misallocations and undercutting long-term financial
security for households, elevated asset prices have heightened the
risk of future financial instability. Also, investors have become
highly (and happily) dependent on central banks, when they should
be prudently more fearful of them.

Source: FS – All-News2-Economy
How the Amazon-Google-Uber effect sets inflation | Mohamed El-Erian