tag:blogger.com,1999:blog-11027528911364475.post7638581841892763957..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Capacity Utilization vs. InflationJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-11027528911364475.post-3020795529421608722012-06-15T20:06:40.224-07:002012-06-15T20:06:40.224-07:00"But inflation is a condition in which all pr..."But inflation is a condition in which all prices rise, not just some."<br /><br />There are many factors that determine the price of an item. I can't buy inflation described in this way. There are plenty of inflationary environments where price drops occur in certain items. Laptops are a prime example.Anonymoushttps://www.blogger.com/profile/05716133794294349576noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-66932855040195750902009-07-10T11:03:47.295-07:002009-07-10T11:03:47.295-07:00Hmmm... by only examining the data since the 80...Hmmm... by only examining the data since the 80's you left out the stagflation era. Was a high correlation in place in the 70s?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-2595048971846501952009-07-10T04:31:24.803-07:002009-07-10T04:31:24.803-07:00bb- you may be right on the top line, but there ar...bb- you may be right on the top line, but there are a lot of ways to they can "hide" the savings if you will.<br /><br />the easiest (and done often, as well as now) is reduced financing. the current financing rate in the U.S. is 3.47% (as of May) down from over 8% earlier this year. same $20,000 price at different rates = different final price.<br /><br />the other ways commonly used are adding additional features "for free" such as a moon roof, high-end stereo, etc... but charging the same overall price.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-31923664869285984222009-07-09T22:52:56.564-07:002009-07-09T22:52:56.564-07:00Demand for new cars hardly has any impact on price...Demand for new cars hardly has any impact on prices: most cars are produced by unionized workforce, the raw materials are being hedged and cost of a vehicle is known well in advance. only the detroit three could afford to stockpile vehicles no one wants, and then slash prices to move the inventory. the rest of the industry is not command based.bbhttps://www.blogger.com/profile/04482856896314696257noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-81844838248609792472009-07-09T21:25:28.954-07:002009-07-09T21:25:28.954-07:00My guess is the correlation makes sense because of...My guess is the correlation makes sense because of somthing like the following. Capacity utilization changes signifcantly at some business. The managers think - better do something about that and lowers prices to try to bump capacity utilization up. I hav observed that it is the change in things that generally get people's attention and result in action not a steady state of affairs (i.e capacity utilzation being low and steady doesn't necessarily prompt action). <br /><br />I agree with you inflation is going to be down in the short to medium term and that credit is more important for inflation than money supply in an economy like the US.Steve van Emmerikhttps://www.blogger.com/profile/16039106967073794988noreply@blogger.com