Economic predictions are notoriously unreliable, especially as different people with illustrious pedigrees can’t seem to agree. For example, after the roughly $2.5 trillion spent on the 2017 Tax Cuts and Jobs Act, inflation didn’t jump higher. Why should it now?
Michael Alexis, CEO of virtual team-building activities company Teambuilding, emailed Zenger News to say that over the last decade he’s also done restaurant industry business in Beijing. China’s inflation rate in the last ten years has run mostly around 2%, with exceptions in 2011 and 2020 . However, the specifics for restaurants in the country’s capital has been far different. He called the industry’s inflationary pressures “massive.
“The worst inflation that I ever experienced, and it wasn’t the normal kind of inflation that you’d think of, was during the dot com era,” said Ray Zinn, who was a semiconductor company CEO for 37 years in Silicon Valley. “Anytime you have a belief that there’s a lack of inventory, that’s when inflation starts.
Ironically, for many businesses, a slight rise in the inflation rate—to 3% or 4%, for example—could be useful. “You need to keep an eye on what your competitors are doing,” said Alessandro Rebucci, an associate professor of finance at the Johns Hopkins Carey Business School. Now that we’re talking about everyone raising prices, it will be much easier for individual firms to raise their prices a little bit without losing demand.
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