chrisr@hcr.UUCP (Chris Retterath) (04/04/84)
Gas prices are not inflationary; in fact, higher oil prices due
to a cartel are not inflationary. Inflation occurs when prices in
general go up; if oil goes up in price for special reasons then
all prices that depend on oil prices will go up, but other prices
will be unaffected (unless higher oil prices cause greater demand
for and consequently higher prices for oil substitutes, as another
special case).
The next time you hear about special cases causing higher
inflation (like the failure of the coffee crop causing higher
coffee prices/ the frost in Florida causing higher O.J. prices),
you will probably be hearing an excuse for inflation. It is somewhat
misleading that Statistics Canada bases the comsumer's price index
on the price changes of certain articles over a period of one month.
The CPI will NOT accurately reflect the inflation rate, which is
affected in the general case by the amount of money in the economy.
Chris Retterath, HCR Corp.