Inflation psychology is challenged by new media

According to the consumer price index released by the US Department of Labor on June 10, the inflation rate in May this year increased by 8.6%compared with the same period last year. rise. What impact will such a serious inflation affect the behavior of consumers?

Some market observers use "inflation psychology" as a reference: consumers foresee that the future prices will be higher than the current level, so consumption tendencies will increase in the short term; in the same way, companies are more willing to raise wages now. A self -continuous salary -price spiral formation is formed until the economy falls into decline. This happened in the last "era of inflation" (1965-1982). Among them, Americans's expectations of inflation are likely to become self -evidence predictions again.

From the perspective of Rory Smead, a professor of humanities and sciences in Northeast University, "inflation psychology" may be only one of the factors of catalyzed wages -price spirals. What response is not easy to predict in inflation. "Economists sometimes focus on one or two easy -to -understand aspects in the overall situation, but in a background, the factors that cause inflation may cause currency tightening in another background." Smid said. As far as the current economic situation is concerned, analysts may ignore the education level of consumers today and their close contact with economic news.

Bruce Clark, an associate professor of marketing in Northeast China, said that real -time news and social media have accelerated the speed of information dissemination and expanded. Inflation is expected to be universal among consumers, which affects their behavior. We first need to understand whether consumers notice inflation? Did they notice price change in their own experience, or did others tell them? In addition, a person's reaction to inflation depends to a large extent on its financial situation. For those who are more economical, inflation may be an annoying but limited disturbance of themselves, which only affects large consumption plans (such as buying a house). Personal concerns about the decline of the United States also affect consumers' expectations for the future. Some people are worried about losing their jobs or reduced work time, which will cause income to decline, so in the face of inflation, they will reduce expenditure.

Studies have shown that consumers generally notice the price fluctuations of the items they have recently purchased or frequently purchased. For example, the price increase of coffee price every day is more likely to attract consumers' attention from the price increases once every few months. In addition, the early purchase behavior in the salary -price spiral is mainly found in goods that can be stored in large quantities, such as foods that can be stored for a long time.

Smid said that once "inflation psychology" works, policy makers will be difficult to stop, and the process of formulating policies for inflation and the various impacts brought by it is extremely complicated.

Source: China Social Science Network-Journal of Social Sciences of China

Author: Wang Youran/Compilation

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