The indexation should be to the average wage, not to the general price level.
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Moreover, given the extraordinary increases in productivity, the general price level, if anything, should be going down.
The only thing that has kept the general price level from catching up with the rise in gold prices is IOR.
The general price level would simply fall as far as was necessary to make it possible to do the desired transactions with the available supply of money.
Most notably, deflation's advocates point to falling prices for certain goods, such as cars, clothes and hotel rooms, as evidence that the general price level is falling.
Yet since inflation is by definition a rise in the general price level, not one set of prices, it's never as orderly as proponents of inflationary policies like to claim.
When countries devalue during full utilisation of resources, the results are a general increase in the price level.
High inflation makes it hard for firms and individuals to distinguish changes in the relative prices of particular items from general changes in the average price level, so price signals become blurred.
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Its sales were also hurt after General Motors and Volkswagen rolled out traditional gas burning, yet price-competitive entry-level models.
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In general, central banks prefer to target the inflation rate, partly because a price-level target is harder to explain, and partly because the need to reverse previous deviations from target may make output more volatile.
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