The Latest, Greatest, Idea – Inflation Inequality

So, the idea is that we’re underestimating how many poor people there are because poor and rich face different inflation rates. Yet we use the common inflation rate – the CPI – to upgrade benefits and the poverty line. Clearly, this is about the US and nowhere else, given that everyone else uses a percentage of median income as the poverty line:

But just how much bigger the percentage of people living in poverty is becoming may have been underestimated by the official census, according to a new report by the Center on Poverty and Social Policy at Columbia University.

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American Inflation Since 1998 – Computers And TVs Decline by 98%

A fascinating little chart of inflation rates for goods and services over the past couple of decades.

As a little test, which things does the government control, price, create a cartel in or allow a cartel in? And which are subject to the terrors of proper free market competition?

No, American health care is not a vicious free market, it’s a cartel, just for those trying to pay attention at home.

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Ain’t Capitalism Great? Price Changes Over The Last 20 Years

So, the things that capitalism produces have fallen in price over the past couple of decades. That’s the pure and unadorned free market capitalism that is. The things where we’ve a managed sorta capitalism have still fallen relative to wages. The things where the government is rather more responsible for production – education and healthcare – have risen in price with respect to wages.

This is the argument that government should run more of the economy of course.…

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Not Really The Best Economic Description Of Why Inflation Is Desirable

It would appear that the United States also suffers from that overexpansion of the universities. It not so much being that there’s not a sufficient portion of the population that will benefit from an academic finishing off but that there aren’t enough people bright enough to teach at them. You know, the difficulty of getting the staff these days.

It is indeed possible to make a case for society having a modicum of inflation. But that case isn’t this one:

A moderate amount of inflation is generally considered to be a sign of a healthy economy, because as the economy grows, demand for stuff increases.

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The Effects Of Tariffs Upon Inflation

So, think through the standard points about trade tariffs. We stick a tax upon goods as they cross the border, inwards. The first two possible responses are:

1) Producers, or importers, cut prices and profit margins in order to be able to keep selling. No inflationary impact.

2) They don’t, they raises prices, inflationary impact.

Which happens depends. Largely on the elasticity of demand for the items. That closely allied to the substituitability. For example, short term demand for oil is notably inelastic.…

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To Get The Very Basics Of Modern Monetary Theory Wrong

Modern Monetary Theory is an oddity. In one sense it’s simply a statement of the blindingly obvious – governments create modern money so they can’t run out of it. As long as they can afford the paper and the ink – something Zimbabwe famously proved it is possible for a government to fail at, their last run of hundred trillion $Zim notes wasn’t worth enough to buy the ink for the next – then they can always print more.…

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Interesting – Developing Country Growth Took Off As Inflation Fell

There used to be a lot of inflation in developing countries. Now there’s lots of growth. The two switched in some senses – which is interesting, no?

The great disinflation in emerging and developing economies
Jongrim Ha, M. Ayhan Kose, Franziska Ohnsorge 10 April 2019

Emerging market and developing economies have achieved a remarkable decline in inflation since the early 1970s, supported by robust monetary policy frameworks, strengthening of global trade, financial integration, and the disruptions caused by the global crisis.…

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Botswana’s New Economics – Salary Hikes Won’t Cause Inflation

It’s always interesting to find new economic theories so here’s one from Botswana. Government hiking civil servant’s wages won’t lead to inflation. Weeeelll, yeeees, maybe. But that’s not the way to bet to be honest. Because we shouldn’t be looking just at the addition to demand such salary hikes will cause. There’s rather more to it than just that:

The recent 10 percent salary hikes announced by President Mokgweetsi Masisi for civil servants, including disciplined forces, will not be inflationary.

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Amazon’s Echo Joins The Consumer Inflation Basket

The Office For National Statistics has said that Amazon’s Echo – or at least products like it, the Google Home and so on – have joined the consumer basket we use to measure inflation. At the same time envelopes have dropped out of that basket.

Obviously enough we’re talking about the effects of technological advance. We all send email so don’t need paper envelopes – at least routinely – and these smart speakers are becoming routine.…

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Amazon’s Whole Foods To Whole Paychecks Ride – Heard Of Inflation Folks?

The Wall Street Journal is telling us that prices are on the rise again at Whole Foods. After Amazon’s takeover there was some hope that perhaps that reputation of “Whole Paycheck” might dissipate a little bit. And sure enough, there were price cuts immediately after the acquisition. But now prices are rising again, no doubt this is just a reversion to mean:

Amazon Slashed Prices at Whole Foods. Now They’re Climbing Back Up.
Online retail giant feels pressure from suppliers facing higher costs

We’re told elsewhere that this is indeed a reversal of policy:

Alas, it didn’t last long.

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