Wednesday, April 17, 2013

Is Paul Krugman a Big Time Banana Eater?

Maybe that's why he thinks there is no price inflation.

Mark Perry writes:
I bought four bananas the other day at the local Safeway, and noticed when I looked at the sales receipt that the cost of the four bananas was only 95 cents, or less than 24 cents per banana. What a bargain! Based on the fruit’s label, those four bananas had traveled from somewhere near the equator in Colombia to the nearby Safeway in DC, and even after traveling more than 2,300 miles from another continent, were available to me for less than a quarter apiece![...] 
Banana prices today, after adjusting for inflation, are 37% lower than in 1980. It’s likely that nothing has changed as far as the physical product is concerned, but the greater efficiencies in production, distribution, and transportation of bananas have resulted in a price reduction of 37% over the last 33 years.

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