Long term price level change

Yesterday I suggested that some types of rarity could be eased over time, so in the long term, the price levels would face deflationary pressure. However, in the long term, we often see that the price levels are increasing in our real world. During the recent two centuries, the price levels have been skyrocketing; however, during our history, the price levels had not changed significantly for centuries till the industrial revolution according to results found by some studies. 

Here we find a strange phenomenon that the increase in the supply and production and the increase in the overall price levels take place at the same time. The most important reason here is that the sharp increase in the supply and production leads to an increase in the entire world population as more production allows more people to have sufficient goods and services to support their lives. Moreover, when new products are invented, new demands of the population are recognised. Therefore, the increase in the population and the recognization of new demands are the two major drives to increase the price levels.

The population increase rate has been in decline, which means the inflationary pressure coming from the population increase is in its decline as well. However, there are many discoveries and inventions of new demands in the markets. This is creating an increasing proportion of the inflationary pressure in our world economy. However, such drive of inflationary pressure is not stable and usually driven by some historically important innovation or invention. The current boost in the market is still driven by the invention of the Internet, that smartphones, Fintech and many other fields are tightly bonded with the Internet.

Overall, I expect that in the near future, the inflation rate is highly likely to be low till the next influential innovation in our society.