Weekly Updates
Weekly Updates
- UK consumer price data shows the most expensive a pint of lager costs almost three times the cheapest. This gap has widened over time. Interestingly, the most expensive pint is not in London but in East Anglia.
- In the United States, regional differences in inflation remain significant. The US may have more of a Florida problem than an inflation problem. While inflation in many parts of the US is back within the pre-pandemic ranges, food, fuel, and housing costs keep inflation in Miami close to 8% y/y.
- Normally within a monetary union, differences in economic and inflation experiences are resolved by a mix of fiscal transfers and labor mobility. Unemployed people move from impoverished areas to places where jobs are available, helping to rebalance the economy.
- Theoretically, the rise of flexible working practices should aid labor mobility. The East Anglian drinker could relocate to the sunlit uplands of the West Midlands, where beer is little more than GBP 2 per pint, while working from home. But other factors may prevent this relocation. Housing markets may make moving difficult. In the US, political polarization and culture wars may already be reducing peoples’ willingness to relocate. Regional variations in inflation may be a warning sign of other strains within a monetary union.
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