TLDR Tech / Founders
Number Go Down: Innovation, Capital, and Deflation from First Principles
The 2% inflation target shapes the cost of capital for every founder raising a round, so it's worth knowing where the number came from. You'd assume rigorous economic research. Nope. A New Zealand finance minister pulled it out of the air during a 1980s TV interview to influence public expectations, and every central bank on earth just copied it. The broader argument is that good deflation (prices falling because entrepreneurs found cheaper ways to produce) is actually the definition of economic progress, and Moore's Law is the cleanest proof since nobody waited until 2024 to buy a computer despite knowing prices would halve every 18 months.
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