http://boharald.blogspot.com/2010/08/inflation-delayed-or-eliminated.html
With some discussion in my other blog. Body:
The Economist is pointing out interesting China facts in last week’s leader.
Snippets:
1.on salary levels: “little more than one-twentieth of the average monthly wage in America. But it is 17% more than the year before.”
2. on how the rich world has come to rely on cheap Chinese labour: “by one estimate, trade with China has added $1,000 a year to the pockets of every American household, thanks to cheaper goods in the country’s stores, cheaper inputs for its businesses
and stiffer competition in its markets.”
3. on inflation in the past: “..expanding the global workforce by a quarter through the addition of cheap Chinese workers helped keeping the prices down in the west..” My comment: how this has held down inflation and this again contributed to competitiveness
should earn more attention
4. on the future: “..higher Chinese wages might start to export inflation.” My comment: productivity increases will probably eliminate that effect and part of the work will go to the next cheap labour market (Joan Robinson“ the misery of being exploited
by capitalists is nothing compared to not being exploited at all”)