Relationship Between New Technology And Inflation

The new technology has the influence in the inflation as well. In the knowledge economy times, due to the adoption of new technology, the labor productivity is improved, the labor cost is reduced. The use of new materials and new energy, the production cost is reduced, too. As a result, the phenomenon of economic appeared that the economic growth and price are not synchronized. The prosperity of virtual economy weakens the interactive relationship between money supply and inflation. Friedman argues that "inflation in any conditions of time and space is a monetary phenomenon". He is convinced that all the inflation is derived from the high growth rate of money supply. But the changing in the money supply and price fluctuation, between consumption …show more content…
stock market continued to boom for a long time. It promotes the options system and the prosperity of employee shareholding system, especially in the NASDAQ sharply demonstration effect. In the silicon, the valley of stock option trading, popular options system has been introduced in the vast majority of high-tech enterprises, and even appeared to options don 't working. In addition, as a result of the new economy is based on knowledge, knowledge spillover, enterprise to hold those who master the knowledge and expertise of the staff. They prevent the technology and knowledge are stolen, employees need to be closely combined with the fate of the enterprise. The fate of the employees to be the owner of the enterprise. Therefore, in addition to wages, employers will give shares or stock option incentive. So, labor relations confrontation is broken. Employees does not necessarily require higher wages, even not opposed to lower wages. Because of lower wages can reduce the product cost, enhancing the competitiveness of this enterprise, and increasing earnings per share are important. In that way, employees can not only share dividends from the equity, for listed companies, employees are also at below-market value to buy the company stock price. Then, after the stock soared, employees make a lot of money. For private and newly created high-tech companies, employees can work hard, improve business performance prompted the listing, and sell the