Airbnb Helps Slay Inflation

Tech gets more out of economic resources, bringing prices down

By Todd Buchholz. Mr. Buchholz is author of “New Ideas from Dead Economists.” Excerpts:

"Airbnb has increased the number of available rooms by more than 25% in U.S. cities."

"How can physical capital grow? Upstarts like Dozr and Yard Club have boosted the supply of equipment by creating a kind of Uber for earthmovers and dump trucks."

"The internet, through fintech and software firms like Square, PayPal , Salesforce and Zuora , fosters a freer flow of funds and faster connection of buyers to sellers."

"Amazon’s nifty feature, “Customers who viewed this item also viewed,” helps consumers play a role by considering substitutes."

"By increasing the visible supply of alternatives, Amazon’s feature tamps down prices. Research by Austan Goolsbee (who was chairman of President Obama’s Council of Economic Advisers) and Peter Klenow found that online inflation is one point lower than the change in the consumer price index."