I’m unable to reconcile with the idea that inflation (monetary shock) should make the immediate consequent lower local or producer pricing pass through to the dollar. Why should the consequent lower local producer pricing pass through to the dollar? The consequent lower local producer pricing is anyway only temporary. Eventually, the lower local producer pricing corrects itself for inflation and rises. Isn’t that what inflation leads to anywhere? Don’t goods become more expensive? In the end, one needs to interpret inflation in its fullest sense. Inflation doesn’t only mean the currency depreciates (which may be the immediate effect), making local producer pricing cheaper outside. It also means over time the local producer cannot produce that item of export at the lower price anymore. The costlier imports that become fewer inform local producer pricing eventually, causing local producer pricing to rise and essentially even out any initial damper the dollar pricing might have been thought to put on possible increases in exports. I firmly believe dollar pricing was introduced in the first place after careful thought. It brings about more stability in the pricing system and mimics the long-term stable scenario rather than the short-lived quasi-stable state produced by monetary shocks.
I suppose GDP depends a lot on how blind consumers are the citizens of that country.. If the citizens are very intelligent and think twice before buying anything, the GDP of that country will be limited and will be known as a poor country.. In USA each person consumes 16 times more than they actually need for survival..
Thank you for making such useful lecture accesible!
SO BRILLIANT AND CLEAR
हमारे देश में हीरो की कदर नहींहै हीरे निकलते हैं और दूसरो के मुकुट मे सज जाते है।
I’m unable to reconcile with the idea that inflation (monetary shock) should make the immediate consequent lower local or producer pricing pass through to the dollar. Why should the consequent lower local producer pricing pass through to the dollar? The consequent lower local producer pricing is anyway only temporary. Eventually, the lower local producer pricing corrects itself for inflation and rises. Isn’t that what inflation leads to anywhere? Don’t goods become more expensive? In the end, one needs to interpret inflation in its fullest sense. Inflation doesn’t only mean the currency depreciates (which may be the immediate effect), making local producer pricing cheaper outside. It also means over time the local producer cannot produce that item of export at the lower price anymore. The costlier imports that become fewer inform local producer pricing eventually, causing local producer pricing to rise and essentially even out any initial damper the dollar pricing might have been thought to put on possible increases in exports. I firmly believe dollar pricing was introduced in the first place after careful thought. It brings about more stability in the pricing system and mimics the long-term stable scenario rather than the short-lived quasi-stable state produced by monetary shocks.
👌🏻👌🏻👌🏻👌🏻💪💪💪🙏🏼
I suppose GDP depends a lot on how blind consumers are the citizens of that country.. If the citizens are very intelligent and think twice before buying anything, the GDP of that country will be limited and will be known as a poor country.. In USA each person consumes 16 times more than they actually need for survival..
kkmkmrmonzo (Akku Vei Titumir College) monzo@imf.org