`Amazon Effect' May Make Central Bank Job Harder: Jackson Hole
- Online competition has made prices more susceptible to shocks
- Average duration of prices fell as share of online sales rose
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U.S. inflation has been lower than standard economic models would predict throughout the current expansion. Some blame the rise of Amazon.com Inc. for keeping prices low, but there’s another so-called “Amazon effect” that might be more relevant for central bankers.
That’s according to a paper presented Saturday by Harvard Business School economist Alberto Cavallo at the Federal Reserve Bank of Kansas City’s annual symposium in Jackson Hole, Wyoming.