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The "inflation allows companies to hike prices" theory is circular reasoning, because inflation IS companies hiking prices in mass and not suffering a sales los
by evancox100 3y ago
The "inflation allows companies to hike prices" theory is circular reasoning, because inflation IS companies hiking prices in mass and not suffering a sales losses sufficient to dissuade them form doing so.
It's absolutely true that in an inflationary environment companies hike prices preemptively. That is the phenomenon known as inflation. Missing from similar theories is any explanation of why this happens sometimes and not others.
- danaris 3y agoI think the missing part is the "narrative of". When the media is already talking about there being inflation, especially when they've been talking about it being anticipated for a while before it showed up, that makes it much easier for companies to raise prices and just say, "It's just like everyone's saying! It's just inflation! You can't blame us!" That's not the same as saying "inflation means companies raising prices; it's tautological."