Greedflation

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Greedflation is a theory that describes the idea that some inflation is driven by increases in corporate profits. Suggested mechanisms include price gouging, price fixing, windfall gains resulting from information asymmetry, monopoly-like power, and external shocks to the economy. The theory, which first gained traction among left-wing pundits and trade unions, [1] was considered fringe before the COVID-19 pandemic.

Contents

According to Paul Hannon of The Wall Street Journal , most economists believe profits have played a larger role in the post-COVID-19 inflationary episode than during the period of inflation that had occurred in the 1970s, although the issue of precisely to what degree has proven controversial and a point of contention. [2] Organizations and notable people that have expressed concern about inflation alleged to have resulted from outsized or unusually high corporate profits include the International Monetary Fund (IMF), the European Central Bank (ECB), Federal Trade Commission (FTC), Isabella Weber, Paul Donovan, and Robert Reich. Some proposed remedies include pursuing anti-trust enforcement, windfall profit taxes, and anti-price gouging measures like price caps. Organizations and notable people who dispute the concept include The Economist while others who think greedflation exists but is not as significant include CNN, Justin Wolfers, Jason Furman, and Noah Smith.

Definitions

The term "greedflation" was a candidate for word of the year for the Collins English Dictionary in 2023, [3] [4] and was added to Dictionary.com in 2024. [5] [6] Collins Dictionary defines it as either "the use of inflation as an excuse to raise prices to artificially high levels in order to increase corporate profits" or "an increase in the price of goods and services caused by businesses increasing their prices by more than their costs have risen". [3] [7]

History

In the wake of the COVID-19 pandemic, inflation increased significantly as did discussion of the role of corporate profits in that increase. [8] [9] Proponents of the theory pointed to data showing that corporate profits outpaced inflation. [8] Economists interviewed by PolitiFact believe rising costs of goods, labor, and real estate are bigger drivers of inflation than corporate profits. [8] Combatting inflation by ensuring corporations are not taking excessive profits was cited by some Democrats ahead of the 2024 United States elections. [10] [11]

Mechanisms

Monopoly power

Economists and politicians argue that the market concentration that occurred in the early 21st century in some major industries, especially retailing, has given companies the ability to wield near-monopolistic pricing power. [12] Isabella Weber and Evan Wasner say firms with a lot of market power in consolidated industries can raise prices under the cover of inflation as a form of implicit cartel-like coordination. [13]

In Australia in 2023 and 2024, major supermarket chains Coles and Woolworths received criticism as price gouging, with critics pointing to their 65% share of Australia's grocery market, [14] as well as their higher prices in neighborhoods with less competition. [15] [16] [17] [18] [19] The meat industry in the United States has also been cited as an example where profits went up industry-wide as prices went up, with some pointing to consolidation and a lack of competition as an underlying cause. [20] Many economists, according to the New York Times in 2022, responded by observing that if these large corporations had so much market power, they could have used it to increase prices at any time, regardless of the COVID-19 pandemic. [12]

Information asymmetry

In the inflationary environment, everybody knows that prices are increasing. Obviously that's a great opportunity for every firm to realign their prices as much as they can. You're not going to have an opportunity again like this for a long time. [21]

—Z. John Zhang, a professor of marketing at the Wharton School at the University of Pennsylvania

Some economists and professors, such as Paul Donovan, [22] Isabella Weber, Albert Edwards, [23] and Z. John Zhang, [12] argue that during times of high inflation consumers know prices are increasing but may not have a good understanding of what reasonable prices should be, allowing retailers to raise prices faster than the cost inflation they are experiencing, resulting in larger profits. [24]

Ernie Tedeschi argues that every realistic economist would agree that in the short-run, there is not perfect competition which can lead to higher profits due to consumers being less informed than the businesses but does not believe the effect is large or lasting. [25] Weber argues that the increased prices in the short-run can also lead to longer-run price increases by activating the wage-price spiral and increasing inflation expectations. [25] In August 2024, the Associated Press reported that greedflation was easing as consumers become more discriminating. [26]

Proposed remedies

Anti-trust enforcement

The FTC released a report in March 2024 finding that some large retailers did not drop prices when input costs dropped. The study found some large retailers sought to gain an advantage over smaller competitors by threatening suppliers with large fines if strict delivery requirements were not met. The FTC also objected to continued elevated profit margins as evidence that there was not enough competition in the grocery sector. [27] The FTC and several state attorneys general in February 2024 sued to block a proposed $25 billion merger between large grocery chains Kroger and Albertsons, arguing the deal would reduce competition and likely lead to higher consumer prices. [28]

Windfall profit taxes

Windfall profit taxes have gained renewed interest following the COVID-19 pandemic, the war in Ukraine, and subsequent surges in energy and food prices. As major American and British oil producers (Big Oil) reported record profits in the first half of 2022, [29] [30] [31] [32] the United Kingdom imposed a 25% windfall profit tax on British North Sea oil producers, which expected to raise £5 billion to pay for a government scheme that reduced household energy costs. [33] In October 2022, U.S. president Joe Biden threatened to seek a windfall profit tax if the industry did not increase production to curb gasoline prices. [34]

Eric Levitz argues that windfall taxes are worth pursuing regardless of whether greedflation is a major factor or not, as it would incentivize producers to invest in expanding production (which takes pressure off of prices) instead of giving out dividends to shareholders. [35] Thomas Baunsgaard and Nate Verson of the IMF recommend implementing permanent windfall profit taxes on fossil fuel extraction but not temporary taxes or taxes on renewable energy. [36] They argue that the taxes should always target a clear measure of excess profits and not be tied to price levels or revenue. [36] Other notable supporters include Joseph Stiglitz and Isabella Weber, [37] [38] among other economists. [39] [40] [41]

Anti-price gouging laws

Eric Levitz argues that these laws are worth pursuing regardless of whether greedflation is a major factor or not. [35] Isabella Weber recommends strict price gouging legislation, praising the 2023 proposal in New York to cap price increases during emergencies to 10% for consumers as well as for businesses upstream. [42] [38]

Price caps

Isabella Weber and her colleagues argue for price caps. [43] [38] Paul Krugman changed his mind and expressed interest in adding price caps to the toolkit to flight inflation. [43] CNN argued against price caps. [44]

Economic analysis

In the words of Paul Hannon writing for The Wall Street Journal in December 2023, "[t]here is broad consensus among economists that the role of profits in fueling inflation is one feature of the recent inflationary episode that made it different from the 1970s. Yet how much of a role profits played is the subject of controversy." [2]

Arguments that profits are not a factor in inflation

In July 2023, The Economist criticized the entire concept of greedflation as "nonsense" and argued that rising prices are not due to "greedy companies" but are a natural result of supply and demand issues caused by the cash infusion to the economy which took place during the COVID-19 pandemic. [45]

Arguments that profits are a minor factor in inflation

In 2022, several economists stated that while price gouging could be a minor contributor to continuing inflation, it is not one of the major underlying causes that started this surge. [46] [24] [12] [47] Justin Wolfers, an economist at the University of Michigan, quotes Jason Furman, who served as chair of the Council of Economic Advisers under U.S. president Barack Obama said, "Blaming inflation on [corporate] greed is like blaming a plane crash on gravity. It is technically correct, but it entirely misses the point." [48] Wolfers states that companies will always charge the highest prices possible, but that competition keeps prices in check. [48] In August 2024, CNN argued that greedflation "is for sure a thing" but is not a primary driver of inflation when averaged out across all industries. [44] Libertarian critics, citing a study by the Cato Institute, accused the Groundwork Collaborative study of deliberately "cherry pick[ing] a one year timeframe [2023] to tell a misleading story", and that profits are not a major fact in inflation. [49]

Arguments that profits are a major factor in inflation

In the United States, some Democratic politicians, [46] [47] as well as other observers, have contended that price gouging or "greedflation" exacerbated the inflation surge in the United States. [46] [24] [12] Robert Reich argued that though price gouging is not the main cause of inflation, there is a lot of evidence it is aggravating the situation. [47] In January 2023, the Federal Reserve Bank of Kansas City released a study showing markup growth likely contributed more than 50 percent to inflation in 2021, far above normal; however, the markup itself could be due to expectations around future costs. [50] [51] A May 2023 New York Times story reported that despite the costs of doing business falling in recent months, many large corporations have continued to raise prices, contributing to the recent inflation surge. It warned that inflation due to profit-taking could lead to an economic downturn created by sustained higher interest rates. [52]

Profit margins

A 2021 analysis conducted by The New York Times found that profit margins across more than 2,000 publicly traded companies were well above the pre-pandemic average during the year, as corporate profits reached a record high. [53] [54] Economists at the University of Massachusetts Amherst found that in 2022 profit margins of U.S. companies reached their highest level since the aftermath of World War II. [51] ECB economists found in May 2023 that businesses were using the surge as a rare opportunity to boost their profit margins, finding it was a bigger factor than rising wages in fueling inflation during the second half of 2022. [55] An IMF study published in June 2023 found that rising corporate profits accounted for almost half of the increase in euro area inflation during the preceding two years. [56]

Fossil fuels

Shortly after initial energy price shocks caused by the Russian invasion of Ukraine subsided, oil companies found that supply chain constrictions, already exacerbated by the ongoing global COVID-19 pandemic, supported price inelasticity, i.e., they began lowering prices to match the price of oil when it fell much more slowly than they had increased their prices when costs rose. [57] Analysis published in June 2023 by the Bureau of Labor Statistics found that, from February 2020 through May 2023, gasoline retailing profit margins had increased 62%. [58] Isabella Weber warned in December 2023 that energy prices are so volatile that special attention should be paid to them to try and keep future supply shocks from causing more sellers' inflation (Weber's term for greedflation). [2]

Grocery prices

An analysis published in early 2024 by the White House Council of Economic Advisers found that U.S. grocery and beverage retailers had increased their margins by nearly two percentage points since the eve of the pandemic, to the highest level in two decades. The analysis found that grocer margins had remained elevated as the inflation surge eased, although margins for other types of retailers had fallen back to historical levels. President Biden and others asserted that shrinkflation, a practice of reducing portion or quantity sizes of packaged foods while maintaining the same price, was keeping profit margins higher than usual. [59] [60] [61] [62] In 2024, Ernie Tedeschi argued that no more than one-fourth of the grocery inflation in the U.S. during COVID could be attributed to greedflation. [25]

Motor vehicle prices

An analysis published in May 2023 by The New York Times found that U.S. auto manufacturers and dealers shifted from a high volume-low margin business model before the pandemic to a low volume-high margin model after the pandemic. A 2023 study published by the Bureau of Labor Statistics found dealer markups outpaced input costs, driving 35% to 62% of new vehicle inflation from 2019 to 2022. [63] Isabella Weber argues that the shortage of chips gave existing producers a "temporary monopoly" where they did not have to worry about new entrants, allowing them to raise prices. [42] In July 2023, Eric Levitz in Intelligencer contested the idea that greedflation was a significant factor in post-pandemic inflation, observing that many of the studies rely on correlation not causation. He also cited an example of how a used car salesman would see profits improve on his existing inventory without cost increases as one example of how companies can get unusual profits without improper behavior; [35] however, he found one argument plausible, even if unproven, that supply shocks could result in greedflation as shortages make it harder for new entrants to gain market share. [35]

See also

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References

  1. ↑ Peck, Emily (May 13, 2023). "Once a fringe theory, greedflation gets its due". Axios. Retrieved November 22, 2024.
  2. 1 2 3 Hannon, Paul (December 2, 2023). "Outsize Profits Helped Drive Inflation. Now Consumers Are Pushing Back". The Wall Street Journal. There is broad consensus among economists that the role of profits in fueling inflation is one feature of the recent inflationary episode that made it different from the 1970s. Yet how much of a role profits played is the subject of controversy.
  3. 1 2 Addley, Esther (November 1, 2023). "'AI' named most notable word of 2023 by Collins dictionary". The Guardian. ISSN   0261-3077 . Retrieved August 21, 2024.
  4. ↑ "AI named word of the year by Collins Dictionary". BBC. October 31, 2023. Retrieved August 21, 2024.
  5. ↑ Bisset, Victoria (February 13, 2024). "Barbiecore? Bed rotting? Greedflation? Dictionary.com adds new 2024 words". Washington Post. ISSN   0190-8286 . Retrieved August 21, 2024.
  6. ↑ Shah, Simmone (February 13, 2024). "'Bed Rotting,' 'Girl Dinner,' and Dictionary.com's Other New 2024 Words". TIME. Retrieved August 21, 2024.
  7. ↑ "Greedflation". Collins Dictionary. Retrieved September 28, 2024.
  8. 1 2 3 Czopek, Madison. "Fact-check: Sen. Casey blamed rising prices on corporations". PolitiFact . Retrieved September 1, 2024.
  9. ↑ Misra, Udit (June 26, 2023). "ExplainSpeaking: What is Greedflation? Does India also have it?". The Indian Express. Retrieved August 21, 2024. There is a growing consensus across the world that corporate greed is the new villain in town...
  10. ↑ Whalen, Jeanne (August 23, 2024). "Price-Gouging Crusade Electrifies Democratic Rank and File". Wall Street Journal.
  11. ↑ Masquelier-Page, Alice (August 16, 2024). "Harris zeroes in on high food and housing prices as inflation plays a big role in the campaign". The Associated Press. Retrieved August 29, 2024.
  12. 1 2 3 4 5 DePillis, Lydia (June 3, 2022). "Is 'Greedflation' Rewriting Economics, or Do Old Rules Still Apply?". The New York Times. Archived from the original on June 25, 2022. When thinking about greedflation, it's helpful to break it down into three questions: Are companies charging more than necessary to cover their rising costs? If so, is that enough to meaningfully accelerate inflation? And is all this happening because large companies have market power they didn't decades ago? ... There is not much disagreement that many companies have marked up goods in excess of their own rising costs. ... When all prices are rising, consumers lose track of how much is reasonable to pay. ... But most of the public argument has been about whether companies with more market share have been affecting prices once goods are finished and delivered. And that's where many economists become skeptical, noting that if these increasingly powerful corporations had so much leverage, they would have used it before the pandemic.
  13. ↑ Burns, Tobias (March 29, 2024). "FTC calls out profits as a driver of grocery prices". The Hill. Retrieved August 17, 2024.
  14. ↑ Ainsworth, Kate (April 15, 2024). "Woolworths and Coles will be asked to explain their profits and higher prices today. Here's what to expect". ABC News. Retrieved August 20, 2024.
  15. ↑ Taylor, David (January 24, 2024). "Are you being gouged at the supermarket check-out? Here's what we know". ABC News. Retrieved August 20, 2024.
  16. ↑ Taylor, David (February 27, 2024). "'No-one has to earn a 30pc profit rate': Coles accused of gouging shoppers as they struggle to put food on table". ABC News. Retrieved August 20, 2024.
  17. ↑ Hurst, Bree; Richards, Carol; Johnson, Hope; Messner, Rudolf (May 8, 2024). "Yes, Australia's big supermarkets have been price gouging. But fixing the problem won't be easy". The Conversation. Retrieved August 20, 2024.
  18. ↑ Barrett, Jonathan (June 19, 2024). "Typical Aldi grocery bill 25% cheaper than at major supermarkets, Choice research finds". The Guardian. ISSN   0261-3077 . Retrieved August 20, 2024.
  19. ↑ Staszewska, Ewa (January 10, 2024). "What to know about the looming supermarket price-gouging review". SBS News. Retrieved August 20, 2024.
  20. ↑ Bojorquez, Manuel (March 9, 2022). "Inflation or "corporate greed"? Meat prices increased by double digits during pandemic". CBS news . According to quarterly reports for Tyson, the nation's largest meat processor, the company posted $3 billion in profit in 2021. ... Other major meat suppliers are also posting similar profits. Some analysts like Salvador believe the numbers don't add up. ... But what we see at the same time is that their profitability has been able to increase because the demand increases for their products have more than offset their cost increases. ... Salvador said there is nothing to keep the prices from increasing as long as "there isn't competition that will help drive down the prices so that they have a reason to actually be more reasonable."
  21. ↑ DePillis, Lydia (June 3, 2022). "Is 'Greedflation' Rewriting Economics, or Do Old Rules Still Apply?". The New York Times. Archived from the original on June 25, 2022.
  22. ↑ Donovan, Paul (November 2, 2022). "Fed should make clear that rising profit margins are spurring inflation". Financial Times. Retrieved February 12, 2023. Consumers seem to be buying stories that seem to justify price increases, but which really serve as cover for profit margin expansion.
  23. ↑ Inman, Phillip (March 24, 2023). "Greedflation: are large firms using crises as cover to push up their profits?". The Guardian . Andrew Bailey, the Bank of England governor, says he has no evidence that excessive profits are pushing up inflation beyond where it would be if companies simply passed on extra costs to consumers, ... Albert Edwards, a senior analyst at Société Générale, ... "Companies [have] under the cover of recent crises, pushed margins higher," he said in a note. "And, most surprisingly, they still continue to do so, even as their raw material costs fall away. Consumers are still 'tolerating' this 'excuseflation', possibly because excess [government] largesse has provided households with a buffer. ... Isabella Weber, an economist at the University of Massachusetts Amherst, has shown which kinds of companies are able to benefit from a crisis, giving academic support for what she considers a rational capitalist reaction to a crisis, one that allows them to make even bigger profits when consumers are primed to expect prices to rise in leaps and bounds.
  24. 1 2 3 Brooks, Khristopher J. (May 27, 2022). "Companies use inflation to hike prices and generate huge profits, report says". CBS News. Archived from the original on June 25, 2022. Some of the nation's largest retailers have been using soaring inflation rates as an excuse to raise prices and rake in billions of dollars in additional profit, a corporate watchdog group charged on Friday. ... The report highlights an ongoing debate about the causes of inflation, with some consumer advocates arguing that corporations are using inflation as a justification for passing on even higher price hikes to consumers. ... To be sure, inflation is rising sharply due to a number of underlying economic issues, such as supply-chain bottlenecks, labor shortages and strong demand from consumers.
  25. 1 2 3 Demsas, Jerusalem (October 29, 2024), Does 'Greedflation' Explain High Prices?, The Atlantic, retrieved October 31, 2024
  26. ↑ Colvin, Jill (August 15, 2024). "Harris zeroes in on high food prices as inflation dominates the presidential race". Associated Press. Retrieved August 21, 2024– via PBS News.
  27. ↑ Burns, Tobias (March 29, 2024). "FTC calls out profits as a driver of grocery prices". The Hill. Retrieved August 17, 2024.
  28. ↑ Ngo, Madeleine (March 21, 2024). "Large Grocers Took Advantage of Pandemic Supply Chain Disruptions, F.T.C. Finds". The New York Times.
  29. ↑ Bussewitz, Cathy (July 29, 2022). "Unprecedented profit for major oil drillers as prices soared". Associated Press.
  30. ↑ Simonetti, Isabella (July 29, 2022). "Exxon and Chevron Report Record Profits on High Oil and Gas Prices". The New York Times.
  31. ↑ Klauss, Clifford (October 28, 2022). "Oil Giants, With Billions in Profits, Face Criticism and an Uncertain Outlook". The New York Times.
  32. ↑ Sanicola, Laura (July 14, 2022). "U.S. gasoline prices are finally falling. Why?". Reuters.
  33. ↑ "UK lawmakers approve windfall tax on oil and gas producers". Reuters. July 11, 2022.
  34. ↑ Baker, Peter (October 31, 2022). "Biden Accuses Oil Companies of 'War Profiteering' and Threatens Windfall Tax". The New York Times.
  35. 1 2 3 4 Levitz, Eric (July 8, 2023). "The 'Greedflation' Debate Is Deeply Confused". Intelligencer. Retrieved August 26, 2024. Similarly, one can make a case for windfall-profits taxes and anti-price-gouging measures without endorsing the greedflation hypothesis. In my own view, it isn't necessarily all bad for producers of high-demand goods to earn high profits — if they reinvest those profits into expanded production. If the public's need for vaccines or computer chips far outstrips their supply, then it would be good for the makers of such things to have more capital at their disposal. On the other hand, if such producers earn windfall profits, then disperse them to investors rather than reinvesting them, there is a case for public policy to change their incentives or redistribute their earnings.
  36. 1 2 Baunsgaard, Thomas; Vernon, Nate (August 2022). "Taxing Windfall Profits in the Energy Sector". IMF Notes. 2022 (2022/002): 1. doi: 10.5089/9798400218736.068 . ISSN   2957-4390. S2CID   252105037.
  37. ↑ Karp, Paul (July 18, 2022). "Nobel prize-winning economist Joseph Stiglitz calls for windfall profits tax in Australia". The Guardian. ISSN   0261-3077 . Retrieved August 26, 2024.
  38. 1 2 3 Sorkin, Andrew Ross; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; Merced, Michael J. de la; Hirsch, Lauren; Mullin, Benjamin (August 16, 2024). "The War on Prices Hits the Campaign Trail". The New York Times. ISSN   0362-4331 . Retrieved August 29, 2024.
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  45. ↑ ""Greedflation" is a nonsense idea". The Economist. Archived from the original on July 6, 2023.
  46. 1 2 3 Lopez, German (June 14, 2022). "Inflation and Price Gouging - We look at whether "greedflation" is causing higher prices". The New York Times. Archived from the original on June 25, 2022. But inflation gives greedy, monopolistic companies a chance to take advantage, said Lindsay Owens, the executive director of the left-leaning Groundwork Collaborative. Profiteering 'is an accelerant of price increases,' she told me. 'It is not the primary cause.'...More recent developments have also weakened the greedflation theory. Inflation has remained high...But the stock market has plummeted;...If the pursuit of profits were driving more inflation, you would not expect to see that.
  47. 1 2 3 Smith, Molly; Wasson, Erik (May 19, 2022). "Democrats' 'Greedflation' Claims Run Up Against Scant Evidence - Some Democrats accuse companies of bilking US consumers". Bloomberg News . Many Democrats blame price-gouging companies for the worst surge in Americans' cost of living in more than a generation. But economists, including several who are left-leaning, disagree.
  48. 1 2 Vanek Smith, Stacy (November 29, 2022). "The mystery of rising prices. Are greedy corporations to blame for inflation?". NPR . Wolfers says companies are always trying to charge as much as they possibly can. In fact, the only reason we're not all paying $800 for a pair of socks or a cheeseburger is simply due to greed in another form: competition. ... "Inflation is coming from demand," says Wolfers. In spite of inflation, demand hasn't really blinked. Companies have been raising prices and we have been paying them. In fact, in many parts of the economy, spending has been rising right along with prices. ... And when our buying slows down, Wolfers says, companies will start lowering prices to entice us to buy: Prices will fall and inflation will ease. But, until demand drops, companies will push prices up as much as they can. It's elementary.
  49. ↑ Brown, Aaron (October 29, 2024). "The misuse of data behind the 'greedflation' narrative". Reason.com. Retrieved October 29, 2024.
  50. ↑ Glover, Andrew; Mustre-del-Río, José; von Ende-Becker, Alice (January 12, 2023). "How Much Have Record Corporate Profits Contributed to Recent Inflation? - Firms raised markups during 2021 in anticipation of future cost pressures, contributing substantially to inflation" (PDF). The Federal Reserve Bank of Kansas City Economic Review. doi:10.18651/er/v108n1glovermustredelriovonendebecker. ISSN   0161-2387. S2CID   256654064.
  51. 1 2 Martin Arnold; Patricia Nilsson; Colby Smith; Delphine Strauss (March 29, 2023). "Central bankers warn companies on fatter profit margins". Financial Times.
  52. ↑ Smith, Talmon Joseph; Rennison, Joe (May 30, 2023). "Companies Push Prices Higher, Protecting Profits but Adding to Inflation". The New York Times. Retrieved May 31, 2023.
  53. ↑ Eavis, Peter; Talmon, Joseph Smith (May 31, 2022). "After a Bumper 2021, Companies Might Struggle to Increase Profits - Businesses face headwinds as demand weakens, the Federal Reserve raises rates and government stimulus programs end". New York Times . A New York Times analysis of over 2,000 publicly traded companies outside the financial sector found that most of them increased sales faster than expenses, a remarkable feat when the cost of wages, raw materials and components was rising and supply chains were out of whack. As a result, profit margins, which measure how much money a business makes on each dollar of sales, rose well above the prepandemic average. On the whole, companies made an estimated $200 billion in additional operating profits last year because of that increase in margins.
  54. ↑ Phillips, Matt (March 31, 2022). "Corporate profits hit a new record high in 2021". Axios.
  55. ↑ Hannon, Paul (May 3, 2023). "Why Is Inflation So Sticky? It Could Be Corporate Profits". The Wall Street Journal. Inflation has proved more stubborn than central banks bargained for when prices started surging two years ago. Now some economists think they know why: Businesses are using a rare opportunity to boost their profit margins...According to economists at the ECB, businesses have been padding their profits. That, they said, was a bigger factor in fuelling inflation during the second half of last year than rising wages were
  56. ↑ Niels-Jakob Hansen; Frederik Toscani; Jing Zhou (June 26, 2023). "Europe's Inflation Outlook Depends on How Corporate Profits Absorb Wage Gains". International Monetary Fund. As the Chart of the Week shows, the higher inflation so far mainly reflects higher profits and import prices, with profits accounting for 45 percent of price rises since the start of 2022. That's according to our new paper, which breaks down inflation, as measured by the consumption deflator, into labor costs, import costs, taxes, and profits. Import costs accounted for about 40 percent of inflation, while labor costs accounted for 25 percent. Taxes had a slightly deflationary impact.
  57. ↑ Cronin, Brittany (May 7, 2022). "The good times are rolling for Big Oil. 3 things to know about their surging profits". NPR. Archived from the original on May 21, 2022. Retrieved May 25, 2022.
  58. ↑ Newman, Rick (July 25, 2023). "High profit margins on gasoline are costing drivers more". Yahoo Finance.
  59. ↑ Tankersley, Jim (February 1, 2024). "Biden Takes Aim at Grocery Chains Over Food Prices". The New York Times.
  60. ↑ Benveniste, Alexis (September 24, 2023). "The costly economic trend here to stay". BBC.
  61. ↑ Boak, Josh (March 8, 2024). "Biden calls out 'shrinkflation' as part of a broader strategy to reframe how voters view the economy". AP News. Retrieved August 21, 2024.
  62. ↑ Mueller, Julia (June 20, 2023). "'Greedflation' is the new inflation as corporate profits balloon". The Hill. Retrieved August 21, 2024.
  63. ↑ Lydia DePillis; Jeanna Smialek (May 20, 2023). "Why Is Inflation So Stubborn? Cars Are Part of the Answer". The New York Times.
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