Most economists say corporate price gouging is, at most, one of many causes of runaway inflation – and not the primary one
Furious about surging prices at the gasoline station and the supermarket, many consumers feel they know just where to cast blame: On greedy companies that relentlessly jack up prices and pocket the profits.
“There are much more plausible candidates for what’s going on,” said Jose Azar an economist at Spain’s University of Navarra. For years, inflation had remained at or below the Fed’s 2 per cent annual target, even while unemployment sank to a half-century low. But when the economy rebounded from the pandemic recession with startling speed and strength, the U.S. consumer price index rose steadily – from a 2.6 per cent year-over-year increase in March 2021 to last month’s four-decade high.
Yet Conlon and many other economists are reluctant to indict – or to favour punishing – Corporate America. When the University of Chicago’s Booth School of Business asked economists this month whether they’d support a law to bar big companies from selling their goods or services at an “unconscionably excessive price” during a market shock, 65 per cent said no. Only 5 per cent backed the idea.
Josh Bivens, research director at the liberal Economic Policy Institute, has estimated that nearly 54 per cent of the price increases in nonfinancial businesses since mid-2020 can be attributed to “fatter profit margins,” versus just 11 per cent from 1979 through 2019. Likewise, NYU’s Conlon cites examples where prices have soared in competitive markets. Used cars, for example, are sold in lots across the country and by numerous individuals. Yet average used-car prices have skyrocketed 16 per cent over the past year. Similarly, the average price of major appliances, another market with plenty of competitors, jumped nearly 10 per cent last month from a year earlier.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
It's a fuel summer: Gas prices, soaring costs leave touring musicians in a tough spotThanks to high gas prices, staggering inflation and other ripples of the pandemic, few corners of the live music industry have gone untouched by financial woes.
Read more »
Experts say these simple inflation-busting strategies can help with Canadians' cashflowIf the cost of living is raising your blood pressure, here\u0027s what you can do
Read more »
It's a fuel summer: Gas prices, soaring costs leave touring musicians in a tough spot$openGraphObjectMap.get($ogKey)
Read more »
Canada's inflation rate spikes to near 40-year high, calls for supersized rate hike mountICYMI: Canada's inflation rate spikes to near 40-year high, calls for supersized rate hike mount — via financialpost Canada Economy Inflation
Read more »
Canada's inflation rate spikes to near 40-year high, calls for supersized rate hike mountICYMI: Canada's inflation rate spikes to near 40-year high, calls for supersized rate hike mount — via financialpost Canada Economy Inflation
Read more »