December 04, 2003

WHERE IS ANY PRICE PRESSURE AT ALL COMING FROM?:

Deflating inflation (Alan Reynolds, December 4, 2003, Townhall)

"Some Fear Inflation Is Ready for a Comeback," or so says the headline of a Wall Street Journal story by Ken Brown. Only six months ago, I felt obliged to debunk deflation scares that were in vogue at the time. Now we are suddenly being urged to worry about inflation. Do things really change that quickly, or do journalists just have to keep discovering something new for us to worry about?

As with the deflation scare earlier this year, the inflation stories in the popular press don't hold up too well on close examination.


In a pretty much globalized economy, why isn't it this simple: if you raise your prices people will switch from buying what you sell to one of your rivals who hasn't raised their prices?

Posted by Orrin Judd at December 4, 2003 08:55 AM
Comments

We just raised our prices.

Posted by: David Cohen at December 4, 2003 09:17 AM

That should be a good test then--what happens to your market share over the next year or so and whether you're able to keep prices higher.

Posted by: oj at December 4, 2003 09:59 AM

Try telling that to Gucci and Pucci.

Posted by: Harry Eagar at December 4, 2003 02:33 PM
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