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online newspapers, afiliate, djs, fuckinggirls, adjunct, sex incest, nanotech, indie bands, make money, mother son, amnesia, sell, three6 mafia sleep lyrics, academe, tech, | Ideally, a small amount of consistant inflation is preferable. Upthread you presented a fairly rosey view of unanticipated inflation. What you said was true, at the same time you didn't tell prince charles the whole story. For instance, although many Americans have debt, many also have savings — particularly those that save for retirement (hopefully everyone). As I mentioned above, just because prices go up doesn't mean your salary will. prince charles If it does (and everyone else's does), our (as a country) global competitiveness prince charles will fall. That makes our exports drop and imports rise causing a trade imbalance. High growth rates can't be sustained. Then the cycle turns around. Worse is how it affects the lower class. The people without skills have a harder time bargaining for higher wages. They don't have a mortgage to try to inflate out of — they rent. |
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In a sense, a high unemployment rate is a tool for firms to keep wages low. When inflation driven by cost-push (rising oil prices) is in online newspapers effect, prices rise without any accompanying gains in productivity or wages (there is no greater competition for labor just because oil prices went up.) [ ...reply just to this | comment on the story... | next new ] 139. Re: Ivory towers by 0tim0 at online newspapers Fri 2 Sep 10:31pmscore of 1 in reply to comment 138 Hmmm. Well, it seems that you are online newspapers saying that the effect of inflation is the same in both cases. It's just that the cause in the one case, rising wages, is good. So that cancels out the bad effects. Working backwards, that is the third issue. The second issue here is whether inflation is good or bad. As you said, anticipated inflation is not so bad (but only if it's small). And in fact, negative or no inflation has a dampening affect on the economy (why buy now if it'll be cheaper tomorrow?) |
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