“Is This the Breaking Point? Fury Erupts as Inflation Soars to Nightmarish Heights: A Glimpse into Capitalism’s Grim Future”
“When inflation is low, companies absorb small changes in prices and only move when there is a big change or a sustained change,” Michael told Bored Panda. “Economists say this is due to ‘menu costs’, because a restaurant, for example, doesn’t want to reprint menus all the time.”
“Prices that move make it harder mentally to the consumer but also raise the value of smart shopping”
“However, when inflation is higher, it happens more often and it can happen multiple times per day in very-high-inflation countries,” the expert says. “But here is where it gets interesting: During [the pandemic], you started to see restaurant menus with stickers over the prices, and THEN they started using iPads. Once they started using iPads, restaurants could change prices very easily, and they did.”
Michael says that, once we have digital pricing in grocery stores, prices will change much more frequently. But this isn’t necessarily a bad thing. “This is more burdensome for the consumer, but it is potentially a good thing because menu prices are sticky going up AND going down.”
“Prices that move make it harder mentally to the consumer but also raise the value of smart shopping,” he explained. “I think it’s probably a good thing overall because it’ll remove the ‘safety cushion’ that merchants had to put in there. But you’ll have to be on your toes.”
“Wouldn’t it be great if there was a currency that was always worth $1 in TODAY’S dollars?” Michael asks. “Whatever you could buy today with $1, you could buy next year with $1? Chile has had such a currency since the 1960s called the Unidad de Fomento. My partners and I are working and will soon launch a digital currency that does the same thing.”
