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by darjen
6104 days ago
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Thanks for the response. How stealthy can they really be about it, though? If it's common knowledge that this is how the government will respond, would this time-delay effect be negated? Wouldn't everyone know that dollars are being pumped, and start raising their prices to compensate? Just trying to wrap my head around this stuff... |
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Suppose that it is pretty easy to look at money printing and figure out how much devaluation results (eg: prices will wind up 10% later).
Even if that's true deciding when to raise your prices (and how much to raise them) has a lot more to do with supply (of your inputs) and demand (for your products) and also what your competitors are up to.
EG:
- you raise your price now, but your competitors raise it less; they take a lot of your business pretty easily
- your customers haven't gotten "their share" of the printed money yet (eg: wages haven't caught up with the devaluation, or they haven't raised prices proportionately yet, etc.) so you lose more by raising prices than you lose by leaving them as-is
...that kind of thing.