« Ranting and raving to the Star | Main | REAL myn eat REAL tacos »
September 24, 2005
My hair's stagflation
I wrote the following on Sunday:
By the time we’re in high school, we have probably all seen inflation firsthand. Prices for almost all goods and services go up over time. When I was in middle school, Supercuts charged $10 for a haircut. By the end of high school, it had gone up to $12. Today, I was charged $14*.
The official definition of inflation is a sustained increase in the price level, which lasts for at least two consecutive quarters (six months). In order to measure inflation, we have to observe and measure any movement in the price level. From one quarter to the next, the price level may shift upward or downward. A shift upward for two consecutive quarters constitutes inflation.
Footnote *: Luckily I had a $2 coupon. Luckily, I also rarely go to Supercuts, though it is the closest salon to my parent's house. The Uzbek barber near my apartment in Manhattan was $8 and he did a much better job. In fact, much better than my first haircut in Manhattan, which set me back $50. How does economic theory explain this? Clearly a case of imperfect information and excessive market power. Perhaps some government intervention in the marketplace will...
Daniel, Stephanie Miller and my god-awful Supercuts haircut at a Democratic fundraiser in Wood Ranch.
Art Torres and Mary Pallant.
Posted by rxu at September 24, 2005 04:49 AM