Inflation is one of the great question marks of the coronavirus era. For the technicians of inflation, there’s a more immediate challenge: how to measure it properly. The problem, according to Alberto Cavallo is that “the basket for a typical consumer during lockdown is very different.”
Since 1972 Americans have sat through more than 9,000 episodes of “The Price is Right”, a game show with an economic twist. After being summoned from the audience by the famous catchphrase—“come on down”—contestants must guess the exact price of prizes, ranging from guitars to garden furniture. Contestants have got a lot worse at guessing prices. Why?
American retailers have yet to pass along higher prices caused by Chinese tariffs, but shrinking product demand caused by the coronavirus could change that, warns Alberto Cavallo.