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A main cause of inflation sticking around is public perception of inflation existing. I feel like there is solid perception that inflation exists. I would not b
by mint2 5y ago
A main cause of inflation sticking around is public perception of inflation existing. I feel like there is solid perception that inflation exists. I would not bet on it being transitory. Even if the underlying cause goes away, it will take longer for the perception to go away because is a self reinforcing phenomenon.
- programmertote 5y agoI'm afraid that after the supply chain issues are resolved (in next year or a bit later), I suspect that the prices will come down. I'd wager that there is always psychological aspect to inflation. This is not to mention that if we don't see prices increased noticeably because inflation gets cool in the next year or so, we'd still be stuck with shrinkflation (the amount of goods you receive per $1 spent would be lesser). I work with a Fortune 200 CPG company and they are already planning to keep prices stable in various ways (including shrinkflation).
- Dumblydorr 5y agoWhy is it self reinforcing? Is it inherent to economics or is it psychological? If bacon goes back down 25%, will the local breakfast shop see those savings? Will they pass them on to their customers? Or will their supply chain or the restaurants themselves absorb the profit and keep the prices high for consumers? Even if they keep the prices heightened, if they don't raise them further, then that'd be a leveling off of inflation, right?