After Wars end, prices rose more sharply than they had done during the wartime period itself, and reached a peak during the Korean War. Thereafter, they declined abruptly, but edged upward again after 1954. Consumer prices, represented by the dotted line, followed the general trend of wholesale prices. They did not rise quite so sharply during inflationary periods however, nor did they fall as precipitously during deflationary periods.
Two reasons, it may be suggested, are chiefly responsible for the fact that retail prices fluctuated within a narrower range than did wholesale prices. Firstly, a larger proportion of the goods and services sold at retail are produced by powerful monopolistic organizations which hold their prices steady despite sharp changes in cost and demand conditions. On the other hand, much of the goods sold at wholesale – farm products particularly – are produced by a relatively large number of producers, under highly competitive conditions. Secondly, a considerable proportion of a retailer’s costs – his expenditures on rent, interest and wages, for instance – tend to remain fairly stable. If they do change, they move sluggishly. Even though prices of the goods he buys from wholesalers may rise sharply, the retailer’s total costs will not rise by nearly the same proportion. Similarly, if wholesale prices fall, a retailer’s total costs will fall less than proportionately. Hence we find that sharp percentage changes in the wholesale prices of raw materials bring about much smaller percentage changes in the prices of the finished goods into which they are fabricated.
On The Fair Tax I've been thinking quite a bit lately about the Fair Tax. For those of you who have not encountered this concept, the basic idea is to replace the income tax (along with payroll taxes, Social Security taxes, estate taxes, and...
Brand Identify Garments For Girls - Get Them Inexpensive From SaleHoo Wholesalers Cheap Clothes For Women. Marketing women's clothing has become and usually might be a lucrative business venture to enter into anyplace on this planet. Whenever you are on the lookout to get a great company venture, marketing women's clothes is...
Advice For Building A Profitable Blog Making a blog is relatively simply. However , maintaining a successful, high traffic blog that earns income is a far tougher process. This is because there are so many different factors which can contribute to the successfulness of a blog....
Tricks Retail Stores Use To Increase Spending During The Holiday Season During the holiday season, many people are consumed with purchasing gifts to give and food to prepare for their friends and family. For some individuals, the simple act of holiday shopping becomes a tradition to be shared with loved ones. ...
During an uncertain market, it’s understandable to be concerned about how market events could affect your investment. But it’s important to remember that market volatility is a normal part of economic cycles. It presents an opportunity to invest in stocks or other market based investment at discounted prices. If your investment portfolio is based on your risk tolerance and is properly diversified across many sectors, investment styles and geographic regions, short-term volatility will have little, if any, effect on your long-term retirement and savings goals.
It’s also important to remember that, historically, there have been various major events that had dramatic short-term impacts on the markets. Looking back, these are now mere blips on financial market radars. Generally, people who stay invested are typically rewarded in the long run.
Tips for Investing Online The concept of doing your investing online through the use of an online web portal has truly revolutionized everything that financial trading is all about, especially in stock exchanges and in the FOREX market. Availability of resources like quick internet...
Real Estate Investments - Good Idea or Bad Idea? Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the...
The Best Safe Investments Available Today When you are considering the best safe investments available today, there are many options from which to choose. The first thing you must understand is there is a wide range of very safe investments that can be made that will...
What Is Jim Rogers Buying Now? A couple of days ago, legendary investor, commodity bull and one-time partner of George Soros, Jim Rogers, was interviewed by Betty Liu of Bloomberg's Singapore office. It seems that Jim Rogers is also of the opinion that Fannie Mae is...
The government can raise the necessary funds by borrowing them – by selling government bonds to the public, banks, insurance companies, pension funds, investment funds and other financial institutions. By doing this, the government can, in effect, “mop up” savings that are not being used for capital investment and inject them back into the spending stream as government spending.
Just How Efficient is the Market? If you are a mutual fund investor, you've probably heard talk of the Efficient Markets Hypothesis (EMH, not to be confused with EMT or Emergency Medical Technician) being bandied about at one point or another. In a nutshell, EMH maintains...
Currency Investing and Protection in your Portfolio - Do it the Smart Way The Decline of the Dollar Can Weigh Down your Retirement Portfolio This post is for investors, including those planning for retirement, who want to allocate part of their portfolio to provide protection (or take advantage of) positive trends of foreign currencies against...
Index Funds 101 The most significant invention in the 20th century as far as investing goes is mutual funds, at least if you are a small individual investor with modest means. Thanks to mutual funds, the benefits associated with large scale international capital...
Mutual Funds Introduction It is really not much of an exaggeration for you to say that mutual funds are one of the best things that the middle class can take advantage of financially since the invention of sliced bread. What mutual funds do,...
As noted above, certain types of government expenditures, such as unemployment insurance and welfare, tend to wise automatically during recessions, as unemployment rises. In addition to this, many of the government’s tax revenues, such as those from income taxes, profits taxes and sales taxes, tend to be depressed by slower economic activity during recessions. With government tax revenues depressed and expenditures rising, there is an automatic tendency for the government’s budget to go into a “deficit” as a recession develops. This budget deficit will then help to counteract the recession automatically, which is why such government expenditures and tax revenues are called “automatic stabilizers”.
Tips and Considerations to Buy a Hybrid Car Many people find themselves considering whether or not they should buy a hybrid car. With the rising costs associated with gas and maintenance of regular gas-driven vehicles, it is becoming less and less affordable for people to own vehicles in...
What is a Sin Tax? I generally have a problem with most so called sin taxes. I think my main problem with sin taxes have to do with politicians purporting them to be anything other than a way to raise money. What are Sin Taxes?...
The Laffer Curve With all the talk of the deficit and the need to raise taxes today seemed a good day to visit the Laffer Curve. Named after Arthur Laffer, a member of Reagan's Economic Advisory Board from 1981 - 1989, the curve...
How to lose a Millionaire Living near Northern Virginia, Maryland is just stones throw away from our front step. The Wall Street Journal has an interesting article detailing some of the economic woes our neighbor to the North is dealing with. Primarily, they have lost...
We examined the problem of economic instability – the tendency of the economy to go into periodic slowdowns, or recessions. Prior to the 1930′s these were generally regarded as temporary adjustments of the economy and of little significance. The prevailing view among economists was that a free-enterprise economy would, if left on its own, provide “full employment” automatically, without any need for intervention by the government. This belief was based on elaborate economic theories that formed the theoretical basis for “laissez-faire”- the belief that the government should not interfere with the economy. Since the economy automatically provided full employment, so the theory said, why interfere with it?
However the Great Depression of the 1930′s, in which the economy wallowed for a decade, forced a rethinking of economic theories. The main challenge to the traditional “laissez faire” theory was advanced by John Maynard Keynes in “The General Theory of Employment, Interest, and Money,” published in 1936. Keynes’ basic theory was that the governmnent’s control over a major “injection” into the spending stream (government spending) and a major”leakage” from the spending stream (taxes) gave the government the opportunity to influence the level of aggregate demand for goods and services in the economy, and thus to influence the performance of the entire economy.
Republicans Supporting Keynesian Economics All Along? Leave it to Fareed Zakaria to point out the irony of Republican tax policy that no one, but economic historians and datamongering financial bloggers (yours truly), have known all along but for whatever reason rarely gets mentioned mainstream news networks....
Review of the Toyota Prius As with many of the vehicles released by Toyota, the Prius has truly become the bearer of standards within its segment. While many automakers still have not developed a green hybrid electric car, Toyota is already working on its second...
Is Our Economy on an Unstoppable Demographic Slide? Economic prognosticator Harry Dent was a guest of Neil Cavuto last night on the Fox Business Network. Dent is one of those "experts" who sells his opinions to investors and financial advisers in the form of subscription newsletters and the...
Pay Debts in the Current Economic Climate In the third quarter of the year 2008, it was noted in figures that the occurrence of personal or individual insolvencies had increased by 8.8 percent in comparison to the previous quarter. Additionally, the numbers in these figures for 2008...
Debt and the Credit Crisis The last recession that our country experienced was, in truth, a mild one. The stock market and many corporate profits began to tank, but consumer spending seemed to dance merrily on through the recession without as much as a scratch....
Resisting Panic: A Quick Guide to Surviving The Credit Crunch A few years ago if you referenced the term "credit crunch", most people would be puzzled. Today barely a single day can pass without the phrase seeing consistent if not constant use in the newspapers and on television. The credit...
Online Forex Trading There are lots of investors who wish to study about online forex trading. One of the causes why currency trading is becoming more and more in demand among private investors is its usefulness. It is simple to learn about online...
Loans and the Credit Crunch The credit crunch is a hot button issue right now, raising red flags in the eyes of consumers not only all over the United States, but also elsewhere in the world. When the economy in the United States begins to...
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