Editing Deflation (section)

===Growth deflation===
Growth deflation is an enduring decrease in the real cost of goods and services as the result of technological progress, accompanied by competitive price cuts, resulting in an increase in aggregate demand.<ref>{{Cite journal |last1=Beckworth |first1=David |title=Aggregate Supply-Driven Deflation and Its Implications for Macroeconomic Stability |journal=Cato Journal |volume=28 |issue=3 |publisher=Cato Institute |url=http://www.cato.org/pubs/journal/cj28n3/cj28n3-1.pdf |url-status=dead |archive-url=https://web.archive.org/web/20111009235909/http://www.cato.org/pubs/journal/cj28n3/cj28n3-1.pdf |archive-date=2011-10-09 }}</ref>

A structural deflation existed from the 1870s until the cycle upswing that started in 1895. The deflation was caused by the decrease in the production and distribution costs of goods. It resulted in competitive price cuts when markets were oversupplied. The mild inflation after 1895 was attributed to the increase in gold supply that had been occurring for decades.<ref>{{cite book|title=The Cost of Living in America: A Political History of Economic Statistics, 1880-2000 |last=Stapleford |first= Thomas|year= 2009|publisher =Cambridge University Peess|pages=69–73}}
</ref> There was a sharp rise in prices during World War I, but deflation returned at the war's end.  By contrast, under a fiat monetary system, there was high productivity growth from the end of [[World War II]] until the 1960s, but no deflation.<ref>{{Cite journal | last1 = Kendrick | first1 = John | title = U.S. Productivity Performance in Perspective, Business Economics, October 1, 1991 | year =1991 | url = http://www.allbusiness.com/finance/262030-1.html }}</ref>

Historically not all episodes of deflation correspond with periods of poor economic growth.<ref>Andrew Atkeson and Patrick J. Kehoe of the Federal Reserve Bank of Minneapolis [https://www.minneapolisfed.org/research/sr/sr331.pdf Deflation and Depression: Is There an Empirical Link?] {{Webarchive|url=https://web.archive.org/web/20160506171400/https://www.minneapolisfed.org/research/sr/sr331.pdf |date=2016-05-06 }}</ref>

Productivity and deflation are discussed in a 1940 study by the [[Brookings Institution]] that gives productivity by major US industries from 1919 to 1939, along with real and nominal wages. Persistent deflation was clearly understood as being the result of the enormous gains in productivity of the period.<ref>{{Cite book| last1 = Bell| first1 = Spurgeon| title = Productivity, Wages and National Income, The Institute of Economics of the Brookings Institution| year = 1940|publisher=Waverly press}}</ref> By the late 1920s, most goods were over supplied, which contributed to high unemployment during the Great Depression.<ref name="Beaudreau1996">{{Cite book|title=Mass Production, the Stock Market Crash and the Great Depression |last=Beaudreau |first=Bernard C. |year=1996 |publisher=Authors Choice Press|location=New York, Lincoln, Shanghi }}</ref>