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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (5661)	11/26/2002 3:00:38 PM
From: GraceZ	Read Replies (2) \| Respond to of 24758

In the first paragraph, Feldman talking about import prices going higher from a falling dollar: Nor is clear to me that higher prices of foreign good would necessarily lead to higher wages for US workers -- which is the prerequisite for imported price increases to turn into inflation. Which is true, higher prices of imports doesn't necessarily lead to wage increases and inflation....but then Eric Chaney in the second to last paragraph: I would nevertheless argue that asset prices are flexible but goods and services prices are much less flexible and wages are almost inflexible. Thus, I fear that exchange rate fixes would not cure the root of the disease (disparities in asset prices) but instead would create another disease (unsustainable disparities in relative unit labor costs). I may sound a bit repetitive, but I fear a large appreciation of the euro would neither solve global imbalances nor treat European structural flaws. Reading it again, maybe I don't know what he said because he says "wages are inflexible" and then says "doller devaluation might setup unsustainable disparities in relative labor costs". If wages are almost inflexible how can an unsustainable disparity arise?