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From my perspective, you're saying the same thing as the parent: both prices and margins have gone up. Then you're stating the definition of inflation. Parent'
by tommiegannert 3y ago
From my perspective, you're saying the same thing as the parent: both prices and margins have gone up. Then you're stating the definition of inflation.
Parent's comment was (implicitly) about 50% of this inflation being avoidable and thus surprising, because margins didn't necessarily have to go up to keep business going. It was just a seized opportunity. If you can show that margins unavoidably always go up during inflation because of some fundamental mechanism, then that would be a refutal of the parent argument.
- deleted 3y ago[deleted]
- marcosdumay 3y agoMargins almost always increase anyway. I'm not sure anybody fully understands the mechanism (for the most studied phenomenon of economics, inflation is quite badly understood), but that doesn't change the fact. Anyway, if you run the Keynes model for macroeconomics, the average margin increases very naturally when the money supply increases. It increases even more if the new money is injected in the economy by well distributed government spending. Still, that's one model we have that kinda works, but it's so full of problems that you can't take its predictions for granted.