On the terms:

  • Disruption is when new players earn say 1m but take over of a 100m market segment, causing damage to well established but less innovative businesses
  • economic growth is what we read about growing markets and iverall economy
  • Inflation is when money gets less worth

Are all these three somehow interconnected, correlated or rather independent? Are there established works on that?

For example, could major diruption outpace economic growth and emphasize inflation?


1 Answer 1


They are interconnected. For example, disruption could lead to deflation, because someone (such as Amazon) can come into the market and sell goods at a lower cost, while increases the quantity of goods. This could grow real GDP (in terms of economic output), while decreasing nominal GDP when adjusting for the deflator (hypothetical scenario).

Economics growth can also lead to nominal price inflation (connection), as more goods and services are sold throughout the economy. Economic growth can also occur with disruption (connection), if the disrupting firms are more efficient in terms of economic output. This would simply increase societies production possibilities frontier.

  • $\begingroup$ I think this is what I do not get: market requirements do not change, but you can produce more efficiently. So you do not need to produce much more at first step but in the next step take over the market segment of the competitor. There is no growth at all, just more unemployment and less demand for suppliers of that market segment - because the production has got more efficient. $\endgroup$
    – J. Doe
    Mar 21, 2018 at 13:44

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