The rapid rise in Asian currencies has placed several Asian cities in the rankings of the "world's priciest cities to live in," according to the latest survey by UBS.
But is it rising Asian currency alone that has put so many of these cities on the "pricey" list? The consensus is that there are other elements at play.
According to Reuters, productivity growth has also helped to raise the cost of living in these cities.
Their claim is accurate. Not just inflation but productivity growth as well means that more value is added in production and this in turn means that more income is available.
However, more available income in conjunction with increasing market demands and an ever-fluctuating "price-willing-to-pay," means that the average cost of city-living can (and usually will) see an increase. That is one of the unavoidable consequences involved with productivity growth.
And it is a condition that many are willing to bear. What is the alternative? One can live in a "cheap" area, but it is usually cheap for a reason: it is economically stagnant. (Author's note: This is not the difference between living in North Dakota and New York City, where the difference in rent is a matter of hundreds of dollars. Rather, it is the difference between living in the industrial Midwest and Nairobi, Kenya where there is production in the former and virtually nothing in the latter.)
The cities on the UBS "pricey" list may be "pricey," but they are also experiencing robust economies, explosions in consumer spending, and exponential increases in manufacturing.
And these are all good things for any country.
Nothing contributes more to reduction of a countries poverty, to increases in its leisure, and to its ability to finance education, and public services than growth in production.
It would therefore be in the best interest of a growing economy to ensure that its fiscal policies are in order so that the monetary increases experienced by productivity growth are not compounded by inflation (as they are now seeing in these "pricey" Asian cities).