Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Apr, 1966, Volume 34, Issue 2

Notes and Comments: Consumer Aspects of Price Instability<504:CAOPI>2.0.CO;2-R
p. 504-508

Frederick V. Waugh

A recent series of papers in Econometrica analyzed the effects of price stabilization upon producers. The analyses and conclusions of this series were remarkably similar to those of a series of papers published in the Quarterly Journal of Economics some twenty years ago, dealing with the effects of price stabilization upon consumers. That series demonstrated that price stabilization itself is neither a blessing nor a burden upon consumers. In a sense, each individual consumer loses if prices are stabilized at or above the simple, unweighted arithmetic average of the varying prices. In a similar sense, each individual consumer gains if prices are stabilized at or below the weighted means of the varying prices.

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