Panflation: A Rising Threat

April 29, 2012 in Daily Bulletin, Signature

Inflation seems to largely be under control in the global economy, but The Economist reports that panflation – the inflation of everything – is becoming a rising problem. Examples include:

  • Since women are more likely to buy clothes if they can easily fit into a smaller label size, fashion retailers have been adjusting the size numbers. Today’s size 10 is really a size 14.
  • There is grade inflation. An A grade today is equivalent to a C grade of the 1980s.
  • Airlines no longer have an ‘economy’ class. Instead British Airways has “World Traveller”.
  • Food portions have been getting larger.
  • There is job title inflation. A receptionist is now a “Director of First Impressions” and a ticket inspector is a “Chief Revenue Protection Officer”.
  • While this sounds humorous it has serious consequences because it modifies incentives and makes data more obscure and less reliable.

To read other examples including the supply of airline miles, the consequences of these trends, what it means for Starbucks to soon be introducing a “Trenta” size, and why deluxe hotel rooms are anything but, click here.

Source: The Economist