Monday, March 15, 2010
Keeping Inflation Numbers Low?
New gadgets tend to go down in price rapidly as production is geared up and techniques improved. Therefore does adding new technology to the basket periodically supress inflation? e.g. I'm sure a Blue Ray player will go down in price, but a disposable camera will probably go up as there are no further production savings to be had. Similarly in the 2000s they brought in mobile phones and got rid of disposable razors. A whole separate issue is 'planned obsolescence'. Companies design products that will wear out and go out of fashion on purpose so you will buy replacements. e.g. I bet you replace your mobile phone a lot more often that you do the hairdryer that's going out of the basket. They only track the price, not how long the product will last.