Shedding a Light on Deflation

A client of Inform came in with an estimate the other day. It was dated November 13th, 1989. The client wanted to know if we would honour the estimate even though it was over 20 years old.

“I do not think we can do that” replied the salesperson.

Yet upon further examination of the estimate, the salesperson replied:

“I can’t honour it, but I can do one better. $200 better”.

The item in question was an Artemide Tizio Classic Black Table Lamp by Richard Sapper. In 1989, the lamp was $655. However in 2010, Inform sells the exact same light for $431. That’s $224 less!

There has been a rise in the general level of prices of goods and services in our economy over the last 21 years. We all know this. A gallon of milk now is $4.89 compared to $2.34 in 1989.

However, sometimes in our market, deflation can happen.

So, remember those great pieces of furniture you couldn’t afford 20 years ago? They may just be in your price range now…


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