Friday, March 04, 2011

Is Amazon deflationary?

Or, rather, is the ability to order (and have delivered, cheaply) almost anything, anywhere in the United States a damper on inflation - at least locally?

This thought popped into my head while watching "Gold Rush Alaska" - I was thinking about the original Gold Rush and the stories of $20 eggs and such. I wondered if anything even close to that could occur again if, say, there was a boom in North Dakota oil. But my immediate reaction was "no way, anyone needed anything they could just whip out a smart phone or log in on their laptop and click away.

It also occurred to me that this was not quite a recent phenomenon (if one that reached further and faster). Sears & Roebuck helped keep the Great Plains in the same goods, at just about the same price, as the rest of the nation.

If only there was a way to quantify this effect. Might make a very interesting paper for an economist [*cough* Running Dog *cough*]...

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