I’m thinking mainly of the US dollar. Is the inflation rate in the US reflected in other countries which use the dollar or which have currencies pegged to the dollar?
Is this different in the EU, where no one country emits the shared currency?
In: 5
Let’s look in the US where certain areas have a higher cost of living. In these areas, prices for things like housing and services are inflated because of increased demand (lots of people in one area) and limited supply (difficult to add more housing, harder to transport goods).
In general, this is balanced out by companies providing more pay. Minimum wages in high cost of living areas are usually increased and average salary is higher.
This does push out poorer people as it gets harder to afford to live in an area as the cost of living increases.
We’re seeing this effect spread due to the pandemic as people are able to work from home. They take their high cost of living salary and move to a low cost of living area. Their money goes a lot farther but it does end up increasing the cost of things in their new area.
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