See there you go with your trick again, that thread was gst impact on business cost, this is inflation... don't try to confuse if you cannot win.
../azul123
well
how would i know what you meant.
but there is a very interesting argument (albeit simplistic) as to why raising wage directly to accomodate effect of price increases will not work.
let's put it this way, consumers have a wide range of choices. if say, you estimate inflation to be 5%, and you happily raise all wages by 5%; the truth is that prices do not increase equally across the board, because they are determined by other factors. true? consumers can also shift their choices to options or equivalents less affected by price changes, unless they are really silly, since well, they can exercise this choice, so why not? therefore, by increasing wages directly you are going to make the consumer
better off than they used to be, which is kind of silly.
this is of course argueable, because of human stubbornness. if rice pricing increases, just switch to something else, which has no link with rice pricing.. but which person would do that unless rice prices go beyond what they can easily afford? :bsmilie:
as to how to combat "rapid price increments", a lot of countries are experiencing it, it is a global trend; and if you ask me, here it is relatively well-handled so far; so have faith. unless of course, you can think of any interesting ways as to how to do it - the short-term solution would be to happily subsidise certain commodities - which is undoubtedly a silly silly idea in the long run.
