Technically the price did still fall in real terms. Not great, though.

Adjusted for inflation 1050 EUR in 2021 is 1,189.2 EUR in 2023.

You're right that's a 7% increase in nominal terms but a 5.5% decrease in real dollar terms.

The tech is also 2.5 years older, which should be taken j to account.

Technically correct, but I doubt salaries followed the inflation, so for most of people, it's just more expensive. :/

Salary growth leads inflation in virtually all cases, and in this one too.

Salaries are only redistribution of current money supply. Inflation means an increased money supply and only banks can increase it, wether it's government banks, private banks, or both.

It's a feedback cycle, arguments about which node in the graph is the "real" one are pointless. My point was just empirical: almost always, the proximate cause of "inflation" is increased consumer spending, and the proximate cause of that is usually salary growth. And it was this time too.

So an argument of the form "salaries don't keep up with inflation" is backwards (usually). They already did!

It is not so simple as to say salaries went up so inflation went up. Inflation from decreased supply at the same time as increased Treasury spending through stimuluses, coupled with the workforce shrinking, is what caused salaries to rise.

Once more, I'm not making an argument about causality. I'm saying that the "compensation" of salaries for inflation already happened.

Arguments about "why" just aren't helpful here. Everyone thinks they're smarter than everyone else and knows policies that will be perfect, and everyone is wrong for the same reasons. It's a cyclic feedback market and it just does this stuff, for the most part.

But you absolutely can't look at things with a microscope and say "salaries don't keep up with inflation", because that's (almost by definition) never true.

It's not a feedback cycle. Inflation is the increase in money existing. Paying higher salaries do not increase the amount of money existing, as that money is taken from somewhere. Raising prices do not increase the amount of money existing. Only the money creators can increase the amount of money existing. Money is created by banks and governments in symbiosis.

Increased prices of labour or products is always a consequence of inflation and never the cause of inflation.

This is conflating "money", which you seem to take colloquially to be a finite quantity of "stuff", with "money supply". Inflation is the result of an increase in the latter, but emphatically not the former. In fact money supply grows and shrinks for all sorts of reasons that have nothing to do with things being created or destroyed.

And to my point upthread: the factors that result in changes in the money supply are themselves subject to influence by lots of things, including stuff like the rate of inflation. It is absolutely, 100%, a feedback network.

Probably because my mother was an economist, I've pretty much ignored the subject my entire life. However, your post piqued my curiosity. Some reading later, and I'm scratching my head: are economists really that dumb? The price of some goods must go down if the price of other goods goes up? Only in some simulation of an economy that doesn't include real humans, right?

> are economists really that dumb?

No, the are really smart. You have to be very intelligent to be able to contrive a way to support an idea that is completely wrong. Intelligent people almost always support the most idiotic political, economical or cultural ideas, because that is a mental challenge that is satisfying. Using the sheer force of their intellect to "beat" normally gifted people in arguments about these issues, they delude themselves to believe they are right, even though they picked an absurd angle just for the challenge.

The particular current case of inflation really took off with Russia's invasion of Ukraine. Talking about salary growth as a cause is way off the mark.

@ajross, money printing leads to inflation, not salary growth.

Why make verifiably false statements like this?

>...

> It isn’t clear that increasing interest rates will have any impact on lowering prices. The nascent resurgence in inflation being experienced across the world is primarily still due to supply chain disruptions. The mechanism by which rising interest rates are supposed to impact inflation is essentially by increasing unemployment, which weakens workers’ bargaining power and thus slows wage growth. But lowering wage growth won’t do anything to address supply side constraints or energy shortages, which are a driver of ‘cost-push’ rather than ‘demand-pull’ inflation.

> ...

> The trade-off for policy makers between creating jobs and wage growth, while simultaneously controlling inflation, goes back to a 1958 paper by economist William Phillips on the relationship between ‘Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957’, which became a cornerstone of macroeconomics. The paper identified the correlation between lower unemployment with higher inflation and vice-versa (see Figure 2).

The explanation for this relationship was that as unemployment decreased the ability of workers to bid for higher wages increased due to less competition in the labour market. Higher wages mean more income to spend on goods and services, which leads to prices going up. This is bad for net creditors and net savers, because the inflation cancels out the interest on savings. By contrast, workers and net borrowers benefit from rising wages and prices, as it allows them to pay off their debt more quickly, which is depreciating in real terms relative to their income.

https://tribunemag.co.uk/2021/11/bank-of-england-rishi-sunak...

Inflation is multifactorial, different types of disruption to the economic web cause different effects on it, the article then goes on to mention the overall lower wages on US and UK post Reagan Thatcher as case study for how labor and wage growth changes inflation rates

Would prefer to see a more reliable source on economics than a democratic socialist magazine website. Maybe a balanced review in an academic journal.

You can get inflation with zero "money printing" if the real economy shrinks. So how do you know you started with the optimal money supply?

(The answer is that only MV is real, not M.)

Adjust for inflation and exchange rate.

What's the point of that? My mom who walks into a store doesn't adjust for inflation. Her income hasn't been adjusted for inflation, let alone exchange rate.

Many people on HN can probably explain why the price is what it is now. That doesn't mean that people are willing (or capable) to pay that much.

It really is hard for some people to understand, right?

Mom makes X

Prices go up

Mom still makes X

And Mom decides not to buy an M2, which makes perfect sense (to me) - most people's income eventually somewhat maybe adjusts for inflation at some time, but prices on milk and stuff adjust much faster.

One of the best ways to look at the effects of inflation is how long between "upgrades" of various things like cars, computers, phones, TVs, etc.

Also, everyone and their mother wanted to buy the M1 when it came out, because it was just so much better than what came before; but there's no real pressing reason to upgrade to the M2 from the M1, so most of the new purchases will be the last few Intel hold-outs upgrading, or new customers.

At $999 and a major performance increase, a new laptop might be a no-brainer (especially compared to replacing batteries, etc).

But at $1199 and a minor increase, why bother?

Not true for retirees because Social Security gets inflation adjustments.

Probably not true in general either except in stagflation.

Social Security is about 30% of the income of the elderly according to the SSA.

https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf

How exactly is it not true for the working mom in my example?

That's stagflation, which happened in the 70s.

Inflation usually means wages going up. Of course they don't all go up at the same time and people get shuffled around, which makes them really angry.

But low wage workers in the US have gotten significant pay raises since 2019. In fact, they're the only workers who are making more after inflation.

https://bcf.princeton.edu/wp-content/uploads/2022/10/Combine...

…This also means wealth and income inequality are down, which maybe people will be happy about.

This isn't a contradiction of my example. My example is pretty clear: Mom makes X before/after prices have gone up, and years after so.

> Inflation usually means wages going up.

Inflation is a rise in prices, that's what it means. Maybe I am being pedantic about your use of "means".

> But low wage workers in the US have gotten significant pay raises since 2019.

Mom in my example hasn't, so irrelevant. Why do you insist on using generalizations to try to contradict an example? My example is very real, the generalization does not apply.

Maybe you should help her find a better job.

> Inflation is a rise in prices, that's what it means. Maybe I am being pedantic about your use of "means".

Wages are a price for labor, so prices going up includes wages.

This thread was about pricing in the EU. Even if it was inflation adjusted, it wasn't adjusted for exchange rate differences, which are a significant part of the price increase on Apple products in the EU.

Lol, interesting how the price went up instead of down, even after having the next generation version released and with 2 years of time lapsing.

All non-US countries experience this. Apple strictly ties pricing to some USD value, which at the baseline is not always 1:1 (meaning it may be more expensive taking into account conversion).

If your country's dollar falls in value, Apple punishes your country. It's not fair to you as an individual, but it's how Apple have operated for at least the last 15 years.

We ought to consider ourselves lucky in the UK. We have Apple Stores that we can walk into a buy Macs. In the 1990s Mac were sold by authorised dealers who closed their stores at the end of the working day. The first Macs you could buy from major electronics retailers were the Performa models. I am not defending Apple, but Macs are more affordable and accessible than they were before while being priced at levels that are way above similar PC hardware. Just like they were before.