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> Prices go up because of supply shocks, companies raise wages, Why would companies raise wages ? More likely: Prices go up because of supply shocks, demand

> Prices go up because of supply shocks, companies raise wages, Why would companies raise wages ? More likely: Prices go up because of supply shocks, demand slows down because of price increase, supply normalizes

ethbr0 4y ago
Because it's a competitive labor market with low unemployment.
- foogazi 4y ago
  But that has nothing to do with supply shock and inflation
  - ethbr0 4y ago
    No, but my point was that a supply shock + that feedback (which is what our current labor market looks like) can create an inflationary spiral.