Average Price of Gimbap in Seoul is 3,838 Won: Why Are Prices Not Falling?

The average price of a roll of gimbap in Seoul is 3,838 won, while jjajangmyeon costs 7,654 won and a bowl of naengmyeon is 12,615 won. According to government statistics, the consumer price inflation rate in July was 2.8%, down from 3.2% in June. However, a decrease in the inflation rate is different from actual price reductions. Even if the rate of increase drops after prices have risen, the prices themselves remain high. The '20-dollar burrito debate' in the United States reflects the same issue. Some economists advocate for 'planned deflation,' where the central bank raises interest rates and lowers asset prices, but this is a risky prescription. In South Korea's high household debt situation, cooling the economy sharply could deliver a significant shock to self-employed individuals and mortgage borrowers. The current monetary policy alleviates pain through bailouts during crises, but the costs do not disappear. Bitcoin has codified rules to prevent the government from arbitrarily supplying currency, raising still important questions. South Korea needs to enhance fiscal discipline and the monetary credibility of the central bank, ensuring that citizens' incomes grow faster than living costs.

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