Mark Whitehouse, Columnist

Amazon Might Help Explain the Inflation Mystery

Online retailers look like they're keeping a lid on prices.

October 16, 2017 at 11:00 AM UTC

Mark Whitehouse is a member of the editorial board covering global economics and finance. Previously, he reported on economics for the Wall Street Journal and was managing editor of Vedomosti, a Russian-language business daily.

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For all its efforts, the Federal Reserve can’t seem to get inflation up to its 2 percent target -- a situation that Chair Janet Yellen has called a "mystery." If she's looking for clues, she might want to ask Amazon.com Inc. founder Jeff Bezos.

Increasingly, economists are talking about the "Amazon effect." The idea is that as online retailers gain market share, they're putting pressure on brick-and-mortar shops to keep prices down. This, in turn, might be preventing inflation from getting back up to normal.