Economic impact of Christmas shopping
By: Ben Labs
People always get excited for Christmas because of presents. So people will go get at least 1 present if possible to get people happy on Christmas. Which can cause a Scarcity because there is always that one toy that so many people want it that not everyone can get it because it is a Private good. So people who pay for this good first will get it. However people are spending a ton of money towards the end of the month so there is more money or less if not a ton of money is being spent is in the economy as shown in this graph. 
Also one thing that makes money spent go up or down for Christmas shopping is how much of it is spent on Black Friday deals because that is when there is a chunk of Christmas shopping is done because of the deals that are going on.
However if there is too much money in the economy inflation will happen which will cause the prices to go up to balance the money in the economy. Which will make less money to be spent so Christmas shopping will either go down or negatively impact the economy. Which will cause the price of items to go down after Christmas just so more money will go into the economy which is deflation. So that is the cause and effect Christmas has on inflation and/or deflation.
Which isn’t the only down side of Christmas spending for the economy. Another downside is that people don’t spend their money evenly for Christmas they do it all in 6-8 weeks. Which will cause a huge increase in economy. However if Christmas didn’t even exist then inflation won’t even happen towards the end of the year or the beginning of next year because then people will spend money more on themselves and what they need or want instead on other people. So they will spend their money more evenly. That would cause another cause and effect called deflation because then not enough money would be in the economy towards the end of the year so then prices would go down until there is more money in the economy.
However people do like to spend a ton of money around Christmas. In order to keep up with what they need or want to get they would want their income to increase. When that happens the progressive tax increases. Which increases the amount of tax on their income.
Businesses do know that people will spend anything around Christmas to make their family happy. That will cause another cause and effect. So the effect is that they could triple or double the price of an item and people wouldn’t even realize it because that is how badly they need that item like a gift or a tradition drink like egg nog that families get around this time.
So with Christmas there is a good increase or decrease in the GDP towards the end of the year depending on how much is spent. Also that people would want more money so they can get every gift possible which causes an increase on taxes on their income.
Work Cited
The Atlantic. Atlantic Media Company, n.d. Web. 29 Nov. 2016. <http://www.theatlantic.com/business/archive/2011/12/is-christmas-bad-for-the-economy/24
961>.
President, BCG Senior Vice. "Year-to-year Percentage of Change in Holiday Retail Sales in the U.S. 1999-2016 | Statistic." Statista. N.p., n.d. Web. 28 Nov. 2016. <https://www.statista.com/statistics/243423/growth-of-christmas-holiday-retail-sales-in-the-us-1999-2011/>.
Continuing with the topic of Christmas, many people are willing to spend their money in a variety of ways. I agree that Christmas is a booming time in the economy, however, this spending is felt more than just over that time of the year. As a society, many people don’t make much money during the year. And we continue to spend vast amounts of money on Christmas presents that aren’t really needed. Even though they see extreme happiness in that time, it eventually hurts in the long-term. People who make minimal income and spend a lot of money on Christmas won’t be spending as much in the next quarter of GDP, therefore, hurting the economy. Even though holidays are a great time of the year, the money and resources that are put into them may not be the best use of resources.
ReplyDeleteDoing a blog post on the money spent during the holiday season was smart. Black Friday and all the time after, right up until Christmas is a very busy time for businesses. I can attest to this because I work at Francesca's, a women's clothing store in the mall, and lately it's been very busy. It was also the first time I've ever worked on Black Friday in retail and it was crazy. I've noticed too that even if the item that someone wants isn't on sale, they still won't even hesitate to buy it. Especially on Black Friday, since people are already in shopping mode, they'll buy whatever as long as it's displayed nicely. Overall, Black Friday and the holiday season in general is a very busy and economically strong time for businesses. Also, it's a time where the GDP goes way up in America.
ReplyDeleteThe economy for many retail stores booms during this time of year. It was very interesting to read your post and see all the different ways Christmas effects our economy. It troubles me sometimes however to see people with so little money spend so much from Black Friday to December 25. This increase of spending in these below average income households only slows down in the next two or three months. Sometimes I hear people complaining about how they don't have enough money to spend year round, when they spend a grand or more during Christmas. It's simple, if you want more money in June, don't spend as much in December.
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