The Economic Impact of Christmas Shopping

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/>.

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