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To: E. Charters who wrote (91084)	11/12/2002 10:09:46 AM
From: Professor Dotcomm	Read Replies (1) \| Respond to of 116922

<Inflation multiplier> The multiplier is a useful indicator but it, too, needs to be treated with a lot of suspicion. As technology develops the value/cost of products usually falls. The best example here is that of a computer although an automobile is also relevant when you consider what extras you are getting today in a new model (reliability, comfort even fuel economy). Consequently much of what we surround ourselves with today costs far less than the equivalent did years ago. Hence we have to think about a 'divider' as well as a multiplier. My guess is that, overall, the multiplier effect since 1945 is actually far lower than 18 - but it depends on whether or not the recipient has a PC, a new car, a color TV etc. (In the period 1865-1905 the value of money went up and this was mainly because of a wave of new industrial technology plus the beginnings of mass production).