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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Ken98 who wrote (30149)	4/28/2000 4:02:00 PM
From: BGR	Respond to of 42523

Ken, My original post was about specific companies, where margins expanded. I posit that this is due to increased productivity. It may not hold for other sectors of the economy, but that's a different, independent issue. As for the aggregate economy, it may be under inflationary or deflationary pressure, depending on the distribution of labor costs across the sectors. Anecdotal evidences mean nothing on aggregate, so I prefer to use Govt. statistics. This, incidentally, shows that inflation has been heating up over the past few months. I suspect that the effect of higher oil prices is acting via a lag here, and as oil prices go down so will future inflationary pressures. As for your last point, over the long run productivity growth may not improve profits, true. But that, by definition, will be deflationary as well. This problem may be resolved by an increase in the money supply. Give the present Fed credit where it is due. -BGR.