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Respond to the question: Lag or lead?

03/03/2007 03:19 AM by name withheld; Lag or lead?

My question is, which of the two economic factors, income and cost/price, lead or lag during the balancing dynamics of budgeteering. That is, does income rise/fall before prices, or do prices rise/fall before income tries to adjust?
My guess is that it is easier to change prices than to change income rates. (By experience) Yet, in management vs labor there seems to be an inverse in these ratios in that management tends to raise income faster than labor, and pricing follows inventory-overhead-cost rates, so the set of parameters becomes more complex in the balance of the value equation. The strength of the exchange medium (ie dollar)is the product of some complex parametric equation. The other complications include the use/abuse of interest for investment, the cost of waste, not to mention too loudly the deadly sin of greed or avarice. Moral pride aside, the complexities of human economic behavior seem as fluid as the world we live in. I'm reminded of the life of Karl Marx who nearly starved in London while trying to survive as a living economic theorist. In passing, the cost of catastrophe is often 'passed' around to the lowest bidder as well. The history of economic theory also reflects the demographics of the finite limits of our natural recource base, but these limits are temporal since we don't live much longer than certain species of trees. Thanks for the opportunity to post. [Manage messages]