According to Prof. Steve Horwitz, one contemporary economic myth is that the cost of living has consistently risen for Americans over the past century. In fact, prices are higher today than they were 100 years ago. However, prices today have been heavily influenced by inflation. One way of avoiding inflationary distortions is to look at amount of labor hours required to make a purchase. Using this analysis, Prof. Horwitz finds that most goods and services have never been cheaper.
Anaarkei made a comment on this video:
It’s also worth pointing out that inflation is not the general increase of prices in the economy. That’s an effect of inflation. Inflation is the expansion of the money supply, these days manipulated by central banks, with varying levels of government control. When more money is circulating, the value of each unit of currency is decreased, thereby reducing its purchasing power. Hence, more money is required to purchase an item, assuming that its value has remained constant.