Do you prices in our economy will lower in the near future?

Question

Gas prices are high, Buying a house is getting high, even a gallon of milk is high. What do you think is gonna happen when the baby boom generation starts fading away? will the economy prices lower, or will it be at a high?

Answer 1

Nominally, most prices will stay high since wages and land costs tend to be 'sticky' (unless you think Keynes was a smackmonkey on acid).

Prices will fluctuate in the long-term depending on market developments. Gasoline will drop in price as vehicles become more efficient or peace comes to the oil-producing regions. Houses will decrease in price as the Baby Boomers start to die in larger numbers. A gallon of milk will probably drop if new cattle farms come into use.

The biggest fear about the Baby Boomers' mass shuffing off this mortal coil is that their investments will lose value, causing steep collapses in the stock market.

Answer 2

That is really doubtful.

Theoretically, prices should be able to come down. The easiest way of putting it, is that if demand for a certain product wanes, than prices have to come down because otherwise suppliers wouldn't be able to get rid of their excess stocks.

In reality, what happens is that since population grows constantly, the demand for most products stays the same. However, since prices can go through the roof at a moment's notice, and wages are basically immutable, than that's where the real drama comes.

Most people want to buy a house, a car, or even go to the movies. The demand exists and business owners know this. But the sad truth is that most people can't afford it. So what happens is that instead of lowering prices, businesses tend to keep their prices high so as to recover from the few customers that they have what they won't make from all those people who can't afford their prodcuts. (that's another justification for free trade...)

The point is that we shouldn't expect prices to come down at all. If anything, we should expect to see prices go even higher than they already have. All we have to do is prioritize our spending and be sure that we don't get into too mucho debt trouble, otherwise it could be curtains for our retirement.

Answer 3

"Prices" in your question, are much like the evolution of technology,,,exponential.

The only decline in cost and service too, will be when the global economy, becomes just that, global,,,or balances,,, or collapses. At that point, price will be more relative to need, than desire.

Rev. Steven

Answer 4

lower. less demand, lower price