I was reading a minyanville article about the mini-tech bubble and one of Toro's catch phrases about the internet being the greatest engine of deflation ever invented got me wondering are there any measures of how deflationary the internet is in different sectors of the economy? And how does this affect the utility of economic models that treat price deflation as a bad thing? Communications obviously is deflationary and the "internet" has become a code word for communications in general despite the legal need for certified mail, the need for UPS/USPS delivery of physical product and no doubt other things I have forgotten about. So how deflationary are we talking about? Are we going to lose Walmart and Target soonish? Is quality of product generally increasing as with computers, decreasing, staying the same or does that depend more on the sector of the economy and the firm or what? This also has political impact because if quality is generally on an uptrend and prices on a down trend then economic policy may be as useful as a football bat.