I have started writing a section for my book on the “greedflation” debate: are corporations jacking up prices to pad profit margins? Since I wanted my book to mainly focus on basic facts about inflation that are true, and not unresolved theoretical debates, it is not entirely a great fit. I was planning on publishing my draft today, but I decided to hold back and explain why that is.
The term, "gouging," greed, puts the topic into a political (civic) framework. Also fitting with that is "try to," though it also makes it concrete rather than purely theoretical--in fact, firms haven't simply tried, they have/had raised prices--an economic framework for "gouging," by private firms acting within their, profit-maximizing, civic mandates might create a simplified model which would say that prices simply rose (and now to generalize beyond this more political than economic crisis to other similar, but more generally theoretically useful patterns of the past) because of market advantage accrued over time via past years/decades profit margins.
So much for framing what everyone must be thinking in seeing the title of this Substack; my question is, these falling aggregate profits in the short-term create lower or higher prices--deflation or inflation? I note you used the term, "aggregate," which might include per-firm, at least in the very short term, higher prices--inflation. Followed by a deflationary crash?
What about only looking at companies with physical products and comparing direct COGS Q to Q?
The term, "gouging," greed, puts the topic into a political (civic) framework. Also fitting with that is "try to," though it also makes it concrete rather than purely theoretical--in fact, firms haven't simply tried, they have/had raised prices--an economic framework for "gouging," by private firms acting within their, profit-maximizing, civic mandates might create a simplified model which would say that prices simply rose (and now to generalize beyond this more political than economic crisis to other similar, but more generally theoretically useful patterns of the past) because of market advantage accrued over time via past years/decades profit margins.
So much for framing what everyone must be thinking in seeing the title of this Substack; my question is, these falling aggregate profits in the short-term create lower or higher prices--deflation or inflation? I note you used the term, "aggregate," which might include per-firm, at least in the very short term, higher prices--inflation. Followed by a deflationary crash?