Dow Chemical
Posted at 8:02am on Jul. 3, 2008 Have You Been Wondering Why High Commodity Prices Haven’t Created a Wage-Price Spiral?
Dow Chemical: A Canary in the Coal Mine?
By blackhedd
I’ve been writing here about high inflation for nearly a year and a half. I think the Federal Reserve has been running an extremely accommodative monetary policy for quite a long time, much longer than the mainstream press has been screaming about high food and oil prices.
But why we aren’t seeing the classic sign of hyper-inflation, a wage-price spiral? Wage increases are the channel through which inflationary pressure metastasizes to the point that it can destroy an economy.
That isn’t happening this time, for a lot of reasons, all of which are interesting. But there is one in particular that is worth calling out because it illuminates a key aspect of tax policy.
In short, businesses are unable to pass increased factor costs on to consumers.
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Posted in Dow Chemical | Economy | federal reserve | inflation | wage-price spiral — Comments (14)/ Email this page » / Read More »
