Originally Posted by
BlackPeter
Isn't this a bit simplified?
Last time I checked: hairdressers do need to eat, i.e. buy food (which is dependent on the world market prices). Most will need to dress themselves - and clothes are all imported. They need to drive a car to work (i.e. buy petrol, which is imported). They need to pay rent which is related to house prices ... and while houses are local, one of the reasons house prices are so high is that building materials (many imported or dependant on world market prices) are in the stratosphere. Which sort of means - if they rise their prices (below the average anyway), they do that because they need to survive. Is this home made inflation?
But hey - I don't think that all inflation is imported, but neither is all inflation home made.
And obviously - any attempt to reduce the home made share of the inflation does have a sting in its tail. Lower home made inflation is equivalent to higher unemployment and lower economic growth - we can't have it both ways.
So - why does it matter anyway how much of the inflation is imported?