The inflation that we have today, between 3 and 4 percent annually, is a wonder compared to what we experienced since the end of the 60s, 40 years ago. That's why Mexicans have been able to improve their quality of life despite the fact that our output has hardly increased, just because prices have been stable.This, among other reasons, is why I find the arguments that the PAN is nothing more than an ineffectual version of the PRI just baffling.
For a better comparison, between 1970 and 1997, the average inflation in Mexico 32.7 percent annually, and if the comparison is from 1979, the figure is 43.3 percent. Since 1997, the average annual inflation rate has been 6.5 percent. Even if we take a base staple whose price has increased a great deal in recent years, tortillas, the difference is brutal. From 1997 to the present, the price of tortillas has increased at a pace of 12.4 percent annually, in good measure due to the American decision to use corn to produce gas, which has elevated the price of a ton of corn from the standard $100 to $300. However, the same tortilla, from 1980 to 1997, increased in price at a pace of 42 percent annually.
The greatest reductions in inflation have occurred in products like rice (which averages 4.5 percent since 1997 versus 43 percent between '80 and '97), and in furniture and domestic goods (4.4 percent now, against 41 percent in the previous period: that's why there are more households with televisions, refrigerators, and washers.
It's important to note that the great economic growth of the 1970s, forced by the government, couldn't produce well-being but it did generate an inflation that we took decades to control. I remind you because it is forgotten, and when one forgets, he makes bad choices.
Monday, June 13, 2011
Inflation Down, Quality of Life Up
Macario Schettino on how decreasing inflation has made modern Mexico a much better place than in was 30 years ago: