Daily Archives: July 14, 2008

Economists Weep With Joy Over the Discovery of the Cause of Inflation

Here is the headline:

Apple Licensing May Contribute to Inflation

and here is the meat:

If it seems prices of the latest iPod and iPhone accessories are rising, you may have Apple’s licensing department to thank, according to a story in Popular Mechanics. Though the company is typically reticent to discuss the details of arrangements such as the one that allows some electronics manufacturers to place a “Made for iPod” designation on their products, managers and decision makers for both retailers and manufacturers indicate Apple’s licensing fees and specially made chips that allow gadgets to work with Apple gear can add 10% or more to the price consumers pay for an item.

Yep, licensing agreements may indeed drive up the price of these accessories.
But, contribute to inflation? Naw, not unless these accessories are part of your price index and people actually bought them at the higher prices while also buying the rest of the goods in the index at the same or higher quantities and prices.
Which would mean that people had more money than they had before which suggests that the real cause of the inflation was most likely an increase in the money supply.
All of which is to say that I thought that headline was really broken.
NB: The headline in the Popular Mechanics article linked in the above quote is much more accurate:

How the “Apple Tax” Boosts Prices on iPod & iPhone Accessories