U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-04-2018, 04:16 PM
 
2,360 posts, read 1,027,668 times
Reputation: 2071

Advertisements

With things going up and up, but not checks. What is the purpose of inflating the market? And yes i did do some reading and cost-push is the cause of over pricing?

Why is it hard to keep the prices in check while increasing wages?
Cost-push inflation is due to wage increases that cause businesses to raise prices to cover higher labor costs, which leads to demand for still higher wages (the wage-price spiral)

Read more: What is inflation? definition and meaning - BusinessDictionary.com
Reply With Quote Quick reply to this message

 
Old 01-04-2018, 06:02 PM
 
311 posts, read 535,154 times
Reputation: 386
Because the government keeps printing money and more money in circulation = inflation.

There was deflation in 2009 due to poor economy and businesses had to cut prices (along with jobs) to survive. Plus the government froze banks.
Reply With Quote Quick reply to this message
 
Old 01-04-2018, 06:53 PM
 
Location: Oceanside, CA
1,738 posts, read 827,032 times
Reputation: 3894
Inflation is bad. Deflation is far, far worse.

Some inflation is a sign of a healthy, growing economy pushing the demand curve to the right. Deflation, while it seems like it's great for savers, is a sign of stagnation and a harbinger of a contracting economy. This is why the Fed has, for decades, had a stated goal of retaining managed inflation.
Reply With Quote Quick reply to this message
 
Old 01-04-2018, 09:43 PM
 
Location: Myrtle Creek, Oregon
11,042 posts, read 11,455,634 times
Reputation: 17204
Quote:
Originally Posted by jnojr View Post
Inflation is bad. Deflation is far, far worse.

Some inflation is a sign of a healthy, growing economy pushing the demand curve to the right. Deflation, while it seems like it's great for savers, is a sign of stagnation and a harbinger of a contracting economy. This is why the Fed has, for decades, had a stated goal of retaining managed inflation.
The US has had several periods of monetary deflation coupled with a high rate of economic growth. In all cases, it was caused by rapid productivity growth coupled with a stable currency. Adoption of steam technology resulted in steady economic growth coupled with falling prices for 1815-1865. Deflation was interrupted by the Civil War, then resumed. From 1873-1879, prices fell 3% a year, coupled with 7% GNP growth. Mechanization of agriculture and assembly line factories continued the deflationary trend. When the Federal Reserve was created in 1913, prices were still lower than they had been in 1800. Over the subsequent century, the dollar lost 96% of its value.

The massive boost in productivity from computerization should have resulted in rapidly rising wages and steadily falling prices. Thanks to inflationary public policy, that did not happen, to everyone's detriment except the bankers.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 10:19 AM
 
8,280 posts, read 3,454,476 times
Reputation: 1584
IMO we will continue to 'suffer' ongoing low grade inflation like any other successful nation. It is hard to do business when your prices, profits and your workers wages will be lower next year.

The key is standard of living, not comparing 17 cent gas of days of old with $2+ today.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 10:54 AM
 
Location: Florida
4,376 posts, read 2,426,594 times
Reputation: 7736
Inflation is a penalty to those (mostly retirees) who live on fixed income. The govt uses bogus numbers to measure the cost of living for Social Security. Then they borrow money and with inflation it is worth less when they pay it back.

Both parties are equally guilty.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 12:48 PM
 
2,360 posts, read 1,027,668 times
Reputation: 2071
So what needs to change to keep it from getting out of hand. Just stop printing money that we dont have? or can business just learn to deal with lower profit margins and sell things little bit cheaper then they actually cost? I see the problem were we demand higher wages to offset the increase in products, but its like beating a dead horse. Again the spiral wage issue as reported.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 01:14 PM
 
8,280 posts, read 3,454,476 times
Reputation: 1584
Quote:
Originally Posted by hitpausebutton2 View Post
So what needs to change to keep it from getting out of hand. Just stop printing money that we dont have? or can business just learn to deal with lower profit margins and sell things little bit cheaper then they actually cost? I see the problem were we demand higher wages to offset the increase in products, but its like beating a dead horse. Again the spiral wage issue as reported.
You can't have it all. We need higher middle class wages and that is inflationary. Bringing more industry home and cutting out imports will raise prices and is inflationary.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 01:28 PM
 
Location: Myrtle Creek, Oregon
11,042 posts, read 11,455,634 times
Reputation: 17204
Quote:
Originally Posted by Hoonose View Post
You can't have it all. We need higher middle class wages and that is inflationary. Bringing more industry home and cutting out imports will raise prices and is inflationary.
You don't need higher wages if you have falling prices.
Reply With Quote Quick reply to this message
 
Old 01-05-2018, 02:31 PM
 
8,280 posts, read 3,454,476 times
Reputation: 1584
Quote:
Originally Posted by Larry Caldwell View Post
You don't need higher wages if you have falling prices.
There would need to be consistent falling of prices in most necessities of life all across the country and over time.

The only way to be consistent would be through the currency, and that is not going to happen.

"The modern currency float has its problems. There is no magical monetary cure, monetary policy is a policy area almost uniquely crowded with trade-offs and lesser evils.

If you want a classical gold standard, you get chronic deflation punctuated by depressions, as the U.S. did between 1873 and 1934.

If you want a regime of managed currencies tethered to gold, you get regulations and controls, as the U.S. got from 1934 through 1971.

If you let the currency float, you get chronic inflation punctuated by bubbles, the American lot since 1971.

System 1 is incompatible with democracy, because voters won’t accept the pain inherent in a gold standard.

System 2 is incompatible with the free market economics I favor.

That leaves me with System 3 as the worst option except for all the others."

David Frum
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top