Where Did The Inflation Go?

An e-mail from Tyler Cowen to Don Boudreaux and David Henderson:

Take 1900 to 2008, minus the few years of deflation near the Great Depression [and a few others] and of course wartime is odd so cut that out too.

Any single year there has been inflation, from one year to the next.

From 1900 to 2008 there has been radical *deflation*, for instance in the Sears catalog. You'd rather spend 10K in the modern catalog than in the old catalog.

If you are spending a million dollars (in either 1900 or 2008), there is very radical deflation. If you are spending $5, you might prefer the Sears catalog of 1900, at least get a few good white shirts.

I don't think it all quite adds up.