Posted by: Ted on 17.10.03 at 07:15:53
This may not be so logical. You would likely be better off by making these large purchases during the economic downturns when fewer others are making these purchases. Lots of businesses will be offering official purchase incentives or at least be willing to haggle.
Hyperborea
The logic has to do with the fact that people's demand for goods (and, in fact, the aggregate demand of the entire economy) rises as their wealth -- or at least their perceived wealth -- rises. It is true that businesses lower their prices during times of reduced demand. This is a countercyclical move that helps to sustain economic activity both at the level of the incividual producer and nationally.
The problem, from the standpoint of both consumers and the overall economy, is that producers don't drop their prices fast enough or low enough to compensate for consumers' reduced demand. In particular, the price of labor (for everyone from carpenters to doctors and CEOs) doesn't drop fast enough to sustain full employment.
In short, people's natural tendency to liquidate assets and spend when they feel wealthy, even though prices tend to be higher then, is logical for them as individuals but contributes to economic booms that eventually lead to busts.