Friday, February 18, 2011

Service inflation is extremely low.

This is either because wages are falling and most of services costs are wages or productivity is soaring due to the bust accelerating the replacement of people with productivity enhancing technology.

It's probably a bit of both.  But services are ripe for a productivity revolution.  Particularly in the government and government subsidized sectors.  Faster please.  Hat tip Carpe Diem.

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