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Car prices haven't changed in 20 years, no inflation?
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I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
asked 4 hours ago
Lassie Fair
931512
add a comment |Â
up vote
2
down vote
favorite
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
asked 4 hours ago
Lassie Fair
931512
add a comment |Â
up vote
2
down vote
favorite
up vote
2
down vote
favorite
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
asked 4 hours ago
Lassie Fair
931512
I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation.
For example, a Toyota Camry sold for about $23,000 +/- $2,000 (MSRP) around 1999-2000, and currently it sells for about the same.
Why is this?
inflation price united-states manufacturing
inflation price united-states manufacturing
asked 4 hours ago
Lassie Fair
931512
asked 4 hours ago
Lassie Fair
931512
asked 4 hours ago
Lassie Fair
931512
asked 4 hours ago
Lassie Fair
931512
asked 4 hours ago
Lassie Fair
931512
931512
add a comment |Â
add a comment |Â
1 Answer
1
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oldest
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up vote
4
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 2 hours ago
EnergyNumbers
6,35311227
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
add a comment |Â
1 Answer
1
active
oldest
votes
1 Answer
1
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 2 hours ago
EnergyNumbers
6,35311227
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
add a comment |Â
up vote
4
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 2 hours ago
EnergyNumbers
6,35311227
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
add a comment |Â
up vote
4
down vote
up vote
4
down vote
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 2 hours ago
EnergyNumbers
6,35311227
Inflation is measured against a basket of goods. It's a symptom of what's going on in markets. Some products go up in price over time. Some go down in time. Some stay the same price, but change their specification. Some stay the same price, and change their specification.
So it's looking down the wrong end of the microscope, to ask why inflation hasn't affected car prices. Car prices are part of inflation. Changes in car prices affect inflation.
The causal link the other way is very very weak. Inflation puts pressure on wages. If this causes wages to rise, then the cost curve shifts, and equilibrium prices change. But for cars, wage costs are a very small part of total car manufacturing cost. And the market for labourers in the industry has shrinking demand and over-supply, so upward pressures are very weak.
The inflation experienced by car manufacturers is very different to the inflation experienced by the public. We've been through a global financial crisis and a super-cycle in commodities. A general-public inflation measure is a very poor measure of input-cost inflation for car manufacturers.
answered 2 hours ago
EnergyNumbers
6,35311227
answered 2 hours ago
EnergyNumbers
6,35311227
answered 2 hours ago
EnergyNumbers
6,35311227
answered 2 hours ago
EnergyNumbers
6,35311227
6,35311227
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
add a comment |Â
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
Thank you for this answer -- very edifying for me.
– Kenneth Rios
2 hours ago
add a comment |Â
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