They will theorize that inflation is out there and soon will be visible. Doubters say we may be misdirected by clinging to theories that ignore structural changes over the past 30 years. Productivity improvements are high on the doubters' list. It has been the inflation ghost buster. Production efficiency keeps prices down.
Competition does also, and competition has changed greatly over the past three decades.
Technology is fiercely price-competitive and innovative, with improvements in both manufacturing processes and product design occurring at a pace unachievable in other decades. Prices of many electronic goods are falling. There are a dozen other reasons to be considered. Greg Tarpinian of the Labor Research Association, which provides data for trade union leaders, observes that even welfare reform is changing the pricing picture. The net of these and other competitive factors, economist Richard Hokenson suggests, is that companies have no pricing power.