Reply To: Prices of Services and Economic Growth


A rising purchasing power of money and falling prices for things traded against money are just two ways of saying the same thing. If money’s purchasing power is falling because of increased production of goods, then the prices of those goods will be falling relative to the prices of other things traded against money. So even if wages for labor services decline during economic progress, prices of goods decline to a greater extent and real wages, i.e., standard of living, rise.