If E-commerce helps kill inflation, why did prices just spike?
Article Abstract:
Reports that show an increase in inflation in September have economists debating whether electronic commerce has fundamentally changed the way the economy operates and has been responsible for keeping inflation low for the past few years. Skeptics point out that E-commerce represents only 1% of all retail sales, and add that the Internet can be used be sellers to set higher prices for some goods and services. Others argue that the Internet exerts downward pressure on prices and gets rid of local monopoly power over prices. For instance, although only 3% of car buyers buy cars over the Internet, about 50% of car buyers now use the Internet to do research before they go to a car dealer, and these report success in getting the dealer to take off at least $1000 off the sticker price. Even if E-commerce has a deflationary effect, other factors, such as globalization and deregulation have contributed to cost-cutting and improvements in production efficiency. Economists are still examining the microeconomic ramifications of E-commerce, and hold that pure market theories will be put to the test by the new digital economy as it emerges.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1999
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Asian enigma
Article Abstract:
Many analysts had predicted that the Japanese would dominate the portable-computer market, but US companies have proven the leaders in portable computing technology and the few Japanese forays into hand-held multimedia devices have fizzled. Apple, IBM, HP and other US firms 'have the vision of multimedia,' according to Apple Japan Pres Shigechika Takeuchi. The distinction between microcomputers and home electronics, a field the Japanese have long dominated, has not yet broken down; Sony, the only major Japanese firm to experiment with portable multimedia, has not been successful with its Data Discman electronic book. Most Japanese firms view multimedia as a technology that is not yet clearly defined, but US firms are rushing to develop it. The Kaleida joint venture between IBM and Apple is working on a new operating system for hand-held multimedia devices and is seeking alliances with Japanese firms. Both US and Japanese executives say that the main reason the Japanese do not lead portable-computing technology is that they do not feel confident setting standards, dictating the direction of the industry or writing software.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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