If we assume what a "profit-price spiral" is by analogy to "wage-price spiral" it has an obvious theoretical problem. Wage price spirals happen because [when t

If we assume what a "profit-price spiral" is by analogy to "wage-price spiral" it has an obvious theoretical problem. Wage price spirals happen because [when the economy is operating near short term capacity], when the cost of living goes up, workers are able to demand and get more money, but that in turn leaves all firms incentivised to put their prices up some more. On the other hand, when prices go up, profits go up... and then firms don't really have any incentive to put their prices up any more because most of that profit isn't finding its way into their customers' pockets (that's a reason for Australians to be concerned about the welfare implications, but it isn't a "spiral"). Companies don't index their prices to average profit levels either. I guess second order effects could include B2B companies and companies selling luxuries to recipients of executive bonuses and massive dividend payouts putting up their prices, but I'm not sure you get an economy-wide "spiral" from that in theory or practice...