Bra-less In Poland In Wintertime

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With apologies to Mel Brooks, and Zero Mostel, this situation is now really getting out of hand. Not only bras, but blouses and T-shirts and mens trousers and pullovers. New Economist has the story here and here. And this on a day when readings of so-called headline inflation (including food and energy) hit the 2.2% per annum level. Fortunately core inflation (without the 2 ‘volatile’ components) is holding steady at 1.4%, but the last thing we want on our wish list for Germany are higher interest rates driven by the need to control the inflationary impact of upward moving clothing prices produced by a desire to protect laggard textile manufacturers from Chinese competition.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

5 thoughts on “Bra-less In Poland In Wintertime”

  1. I was wondering when you were going to comment on this Edward. But we shouldn’t forget the importstop has been in action for about a month now. I think it takes a little while longer for the impact is going to be felt. If clothing pricehikes (or more correctly “lack of further discounts”) are going to happen it will start with the late fall/winter 2005 and spring 2006 fashion lines.

    It’s a funny title though.

  3. “If clothing pricehikes (or more correctly “lack of further discounts”) are going to happen it will start with the late fall/winter 2005 and spring 2006 fashion lines.”

    Oh, I’m sure you’re right, and I’m also pretty sure that given the weighting of clothing in the CPI this won’t be big trouble from little China stuff, but it is the principal behind it which matters, we shouldn’t be actively working to push up inflation on items like these.

    “There may be some truth to the fact that China was flooding the market for some categories (not all i have to add).”

    Again this may well be true, we don’t have to be naieve. What I do think is that it would have been more interesting to take the clothing and extract some other kind of concession in return, some things that the Chinese could usefully buy from us. Stuff for the Beijing-Shanghai railtrack eg, both the French and German industries would really love that.

  4. “Oh, I’m sure you’re right, and I’m also pretty sure that given the weighting of clothing in the CPI this won’t be big trouble from little China stuff, but it is the principal behind it which matters, we shouldn’t be actively working to push up inflation on items like these”

    I know, it wasn’t a smart move and it doesn’t solve anything for Europe’s lagging textile industry apart from buying them some extra time (and local voters?) but from what I’ve seen sofar the big kicker for inflation next year is going to be rising energy prices (gas/oil/coal). Unless they come down substantially before winter it’s going to be a challenge to keep inflation under 2% next year. Cheap Chinese clothing imports alone won’t do it.

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