The Deflation Index

Measuring where technological productivity flows.

The Four Sectors

Computing

99.91%
Cost per GFLOPS collapsed from $10,000 to $0.01. Storage fell from $10,000/GB to $0.014/GB. Computing power that cost millions is now essentially free. Weight: 29.41%

Communications

99.8%
Long distance calling went from $0.25/min to $0.00 (WhatsApp, Zoom). Mobile data from $1,000/GB to $0.02/GB globally. Communication is essentially free. Weight: 23.53%

Energy

90%
Solar: $20/watt to $0.20/watt (2010-2024). Batteries: $7,500/kWh to $115/kWh. LEDs: 90% less energy. Clean energy now cheapest in history. Weight: 29.41%

Transportation

88%
Lithium-ion battery costs dropped from $7,500/kWh (1991) to $115/kWh (2024). Electric vehicles transitioning from luxury to mass market. Measured 2010-2024. Weight: 17.65%

Weighted Index: 29.41% Computing + 23.53% Communications + 29.41% Energy + 17.65% Transportation
DI: 100 (1990) → 3.74 (2024) | M2: 100 → 650.2

Technology delivered massive deflation.

The money supply expanded dramatically.

THE DATA

The Divergence (1990-2024)

All indexed to 100 in 1990. Technology delivers dramatic deflation (cyan), while money supply expands massively (green). The gap between them reveals the divergence.

DI
Technological deflation
M2
Monetary expansion

Two systems, opposite directions

ANNUAL TECH DEFLATION
-9.21%
ANNUAL M2 EXPANSION
+5.7%

The gap: 14.9 percentage points annually

TECHNOLOGY ↓ -96.26%
Pushed Prices Down
MONEY SUPPLY ↑ +550%
Pushed Prices Up

Technology creates exponential deflation—costs collapsed 96.26% across computing, communications, energy, and transportation. Meanwhile, the money supply expanded 550%. These opposing systems create a 14.9 percentage point gap every year, compounding over 35 years into a massive divergence.

Where does the productivity go? It concentrates into asset prices, intermediaries, and financial complexity—rather than flowing to consumers as lower prices.

35 Years of Deflation

1990

Base Year

Computing costs astronomical. Mobile phones rare and expensive. Solar power niche. Base year for all calculations. M2: $3.0T.

2000

Dot-Com Boom

Internet adoption accelerates. Computing costs collapse 95% from 1990. Communications revolution begins. M2: $4.9T (+48%).

2007

Smartphone Era

iPhone launches. Mobile computing becomes universal. HDD storage costs drop to $0.10/GB. Communications essentially free. M2: $7.4T (+124%).

2010

Energy Inflection

Solar panel costs drop below $2/watt, beginning steep decline. Lithium-ion batteries begin 20%+ annual cost reductions. LED adoption reaches scale. M2: $8.8T (+167%).

2020

COVID Money Printing

M2 expands 24% in a single year. The largest peacetime expansion in history. Tech deflation accelerates. Gap widens dramatically. M2: $18.4T (+457%).

2024

Current State

Computing 99.99%+ cheaper than 1990. Communications essentially free. Solar cheapest energy in history. DI: 3.74 (down 96.26%). M2: $21.3T (+550%).

The Data Speaks

Technology delivered 96.26% deflation. The money supply expanded 550%. These two forces—one pushing prices down, one pushing them up—diverge by 14.9 percentage points every year. This is measurement, not theory.

Download Data Methodology GitHub

Independent analysis tracking technological deflation across four fundamental sectors.
700+ verified formulas. 400+ data points. 35 years (1990-2024).
Data reflects year-end 2024. Next update: Q2 2026 with 2025 data.
Data from Federal Reserve, BLS, IRENA, BloombergNEF, AI Impacts, DOE, FCC.