Row 76320

Row ID: 76320 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 76320 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

> You need deflation for prices to drop

Just chiming in: this isn't true. For CPI as a metric? Sure, but that's not what consumers see or care about.

The price of a good is dictated by more than the value of the dollar. Corporations can see inflation occurring, identify the expectation that consumers have of prices rising, and in response price their items even higher than inflation would have otherwise rose them to, as consumers will be less resistant to the price increase due to inflation.

We've seen this with McDonald's, for example. They've raised menu item prices by 20-50% in the past 3 years. That does not track with inflation, but it's certainly still a result of it, as inflation provided the cover for the price increases.

Now, after some backlash, the prices are falling.

In other words, here's the timeline: prices rise due to inflation, prices rise beyond inflation, prices fall back down more or less in line with inflation.

You'll see this type of pattern with many consumer goods, pretty much anything that isn't fungible enough to be traded as a commodity.

TDLR: It's a "give an inch, take a mile" type situation, where inflation is the inch and price rises are the mile.

FieldValue
text > You need deflation for prices to drop Just chiming in: this isn't true. For CPI as a metric? Sure, but that's not what consumers see or care about. The price of a good is dictated by more than the value of the dollar. Corporations can see inflation occurring, identify the expectation that consumers have of prices rising, and in response price their items even higher than inflation would have otherwise rose them to, as consumers will be less resistant to the price increase due to inflation. …
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-24
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Raw Record

{
  "text": "> You need deflation for prices to drop\n\nJust chiming in: this isn't true. For CPI as a metric? Sure, but that's not what consumers see or care about.\n\nThe price of a good is dictated by more than the value of the dollar. Corporations can see inflation occurring, identify the expectation that consumers have of prices rising, and in response price their items even higher than inflation would have otherwise rose them to, as consumers will be less resistant to the price increase due to inflation.\n\nWe've seen this with McDonald's, for example. They've raised menu item prices by 20-50% in the past 3 years. That does not track with inflation, but it's certainly still a result of it, as inflation provided the cover for the price increases.\n\nNow, after some backlash, the prices are falling.\n\nIn other words, here's the timeline: prices rise due to inflation, prices rise beyond inflation, prices fall back down more or less in line with inflation.\n\nYou'll see this type of pattern with many consumer goods, pretty much anything that isn't fungible enough to be traded as a commodity.\n\nTDLR: It's a \"give an inch, take a mile\" type situation, where inflation is the inch and price rises are the mile.",
  "label": "r/investing",
  "dataType": "comment",
  "communityName": "r/investing",
  "datetime": "2024-05-24",
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