Thanks for posting this article. Its crucial that while inflation still a bit high at 6.5% is starting to head in the right direction. We also need to tune out those who are still calling for uber aggressive rate hikes as well. Chances for a 25 basis point rate hike are getting stronger the next FOMC meeting.
Such an important point: "Businesses are not perfect forecasters of what people are willing to pay, and they adjust to prices based on sales outcomes." They may not be perfect forecasters, but they're probably better forecasters than consumers -- at least the bigger companies that are an ever-larger share of our economy and can afford to invest in data, models and talent to improve their forecasting abilities. If businesses are marginally better forecasters than consumers, they can anticipate contractions in consumer demand and adjust supply/purchases accordingly, reducing the eventual need for price reductions.
Thanks for posting this article. Its crucial that while inflation still a bit high at 6.5% is starting to head in the right direction. We also need to tune out those who are still calling for uber aggressive rate hikes as well. Chances for a 25 basis point rate hike are getting stronger the next FOMC meeting.
I can’t take Krugman seriously in his latest opine in NYTimes. https://www.nytimes.com/2023/01/24/opinion/us-debt-deficit-economy.html
Such an important point: "Businesses are not perfect forecasters of what people are willing to pay, and they adjust to prices based on sales outcomes." They may not be perfect forecasters, but they're probably better forecasters than consumers -- at least the bigger companies that are an ever-larger share of our economy and can afford to invest in data, models and talent to improve their forecasting abilities. If businesses are marginally better forecasters than consumers, they can anticipate contractions in consumer demand and adjust supply/purchases accordingly, reducing the eventual need for price reductions.