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I can think of scenarios that explain this without the explanation being "corporate greed". eg if you had cheap suppliers and expensive suppliers, then the chea

I can think of scenarios that explain this without the explanation being "corporate greed". eg if you had cheap suppliers and expensive suppliers, then the cheap ones went out of business, the expensive ones' profit would rise without their actively doing anything. That's what happened with eggs in the last year; the price went up because nearly all the suppliers' chickens caught bird flu and had to be culled. So the surviving ones made a lot of profit as a reward for still operating. But prices are back to normal now. Easier than explaining this: > Inflation is now beginning to regulate in most major economies and coming closer to most central banks’ targeted 2%. Some companies that previously passed rising costs on to customers to continue making a profit have now sought to repay them with price cuts. Good thing those companies that were greedy in 2021 are apparently negative greedy in 2023. I guess greedflation is transitory.

stavros 3y ago
Wait, give me a minute, I think I might be able to come up with some explanation: Corporations inflated prices when they could get away with it, and deflated them when they no longer could. I think my explanation is actually easier than the supplier thing.
- AnimalMuppet 3y ago
  Define "could get away with it". What normally prevents this is competition, not regulation. Normally, if someone raises prices of something like eggs "too far", then people buy their competitor's eggs. So "could get away with it" means that competition no longer prevented them from raising prices. So that brings you right back to the supplier thing, or something very much like it.
  - s1artibartfast 3y ago
    Or consumer demand was a lot less price sensitive than it was in the past. I have enough money that when the price of eggs goes up, I grumble and buy them anyways. I dont skip the eggs and go buy dried beans.
    - AnimalMuppet 3y ago
      Plausible. For that to be the case, though, either consumer psychology changed, or consumers have more money than they did. I could buy Covid changing psychology ("I've been holed up for two years; I'm going to go have some fun!"), but if so, that should be a temporary effect. Or, consumers have more money. That could come from dumping a bunch of money into the economy. (In fact, that was a goal of dumping money into the economy.)
      - didibus 3y ago
        > but if so, that should be a temporary effect Isn't that what we are seeing, that prices are starting to come down?
        astrange 3y ago
        Prices coming down actually isn't the opposite of inflation - the ideal is that they stop changing, which is "disinflation". Prices going down in a single sector is okay, especially a volatile market that's kind of used to it, but when it happens everywhere that's "deflation" and means you're in the middle of a serious economic crisis like 2008.
        didibus 3y ago
        It's more nuanced given the greedflation theory I believe. Traditionally, inflation is attributed to: increased production costs (like raw materials, labor, etc.), increased demand, and monetary factors. Greedflation instead says some of it is also attributed to: firms with significant market power increasing prices more than would be necessary to cover their increased costs. This kind of price increase is not driven by the usual market dynamics of supply and demand but rather by the strategic pricing decisions of dominant firms in less competitive markets. That means, as competition ramps up, or buyers start holding back expenses, prices will come down again, to what should have been the "real inflation" all along.
        3y ago
  - astrange 3y ago
    Well, it's not necessarily that people buy the eggs. I think in reality grocery stores act as a monopsonistic purchasing agent and handle suppliers for the people. That's that Walmart low price guarantee. I do remember my local store sold out of regular eggs (since the alternative to a price hike is a shortage) and I had to buy a pack of extra fancy ones that were all different colors and tasted unusually rich because they were fed on caviar or something. I tried to make that purchase last longer on principle.
- zamfi 3y ago
  You're both saying the same thing, which boils down to supply and demand. Supply shocks (e.g., bird flu) result in price rises in the presence of relatively inelastic demand (e.g., consumer staples). In economic terms, "get away with it" means "what the market will bear". Find me a company that doesn't try to charge as much as it thinks it can to optimize for total profit when you account for decreased sales due to higher prices than other sellers in the market.
- astrange 3y ago
  That is not the same thing as "greedflation" (getawaywithitinflation?) so it also conflicts with the article. You seem to be suggesting more of a buyer side change in what prices they forgive. Any explanation needs to show why it didn't happen from 1990-2021, did happen 2021-2022, and then partly undid itself. Certainly some room for psychological factors in 2020, but it's probably not the main reason.
  - didibus 3y ago
    Yes, the explanation is pretty simple, buyers assumed that it was due to the Pandemic and the War in Ukraine, and all the effects on supply chains and all that. It's not even necessarily "they got greedier", even CEOs expected troubled times ahead, and rising costs, so they also increased their prices, but they did so preemptively, instead of as a reaction to actual rising costs. What happened then is that they raised prices higher than the costs ended up being, and they did not immediately correct this, until they started seeing buyers change their behavior where they now feel the pressure to lower prices again (in order to sell more).

stavros 3y ago

Wait, give me a minute, I think I might be able to come up with some explanation: Corporations inflated prices when they could get away with it, and deflated them when they no longer could. I think my explanation is actually easier than the supplier thing.

AnimalMuppet 3y ago
Define "could get away with it". What normally prevents this is competition, not regulation. Normally, if someone raises prices of something like eggs "too far", then people buy their competitor's eggs. So "could get away with it" means that competition no longer prevented them from raising prices. So that brings you right back to the supplier thing, or something very much like it.
- s1artibartfast 3y ago
  Or consumer demand was a lot less price sensitive than it was in the past. I have enough money that when the price of eggs goes up, I grumble and buy them anyways. I dont skip the eggs and go buy dried beans.
  - AnimalMuppet 3y ago
    Plausible. For that to be the case, though, either consumer psychology changed, or consumers have more money than they did. I could buy Covid changing psychology ("I've been holed up for two years; I'm going to go have some fun!"), but if so, that should be a temporary effect. Or, consumers have more money. That could come from dumping a bunch of money into the economy. (In fact, that was a goal of dumping money into the economy.)
    - didibus 3y ago
      > but if so, that should be a temporary effect Isn't that what we are seeing, that prices are starting to come down?
      - astrange 3y ago
        Prices coming down actually isn't the opposite of inflation - the ideal is that they stop changing, which is "disinflation". Prices going down in a single sector is okay, especially a volatile market that's kind of used to it, but when it happens everywhere that's "deflation" and means you're in the middle of a serious economic crisis like 2008.
        didibus 3y ago
        It's more nuanced given the greedflation theory I believe. Traditionally, inflation is attributed to: increased production costs (like raw materials, labor, etc.), increased demand, and monetary factors. Greedflation instead says some of it is also attributed to: firms with significant market power increasing prices more than would be necessary to cover their increased costs. This kind of price increase is not driven by the usual market dynamics of supply and demand but rather by the strategic pricing decisions of dominant firms in less competitive markets. That means, as competition ramps up, or buyers start holding back expenses, prices will come down again, to what should have been the "real inflation" all along.
        3y ago
- astrange 3y ago
  Well, it's not necessarily that people buy the eggs. I think in reality grocery stores act as a monopsonistic purchasing agent and handle suppliers for the people. That's that Walmart low price guarantee. I do remember my local store sold out of regular eggs (since the alternative to a price hike is a shortage) and I had to buy a pack of extra fancy ones that were all different colors and tasted unusually rich because they were fed on caviar or something. I tried to make that purchase last longer on principle.
zamfi 3y ago
You're both saying the same thing, which boils down to supply and demand. Supply shocks (e.g., bird flu) result in price rises in the presence of relatively inelastic demand (e.g., consumer staples). In economic terms, "get away with it" means "what the market will bear". Find me a company that doesn't try to charge as much as it thinks it can to optimize for total profit when you account for decreased sales due to higher prices than other sellers in the market.
astrange 3y ago
That is not the same thing as "greedflation" (getawaywithitinflation?) so it also conflicts with the article. You seem to be suggesting more of a buyer side change in what prices they forgive. Any explanation needs to show why it didn't happen from 1990-2021, did happen 2021-2022, and then partly undid itself. Certainly some room for psychological factors in 2020, but it's probably not the main reason.
- didibus 3y ago
  Yes, the explanation is pretty simple, buyers assumed that it was due to the Pandemic and the War in Ukraine, and all the effects on supply chains and all that. It's not even necessarily "they got greedier", even CEOs expected troubled times ahead, and rising costs, so they also increased their prices, but they did so preemptively, instead of as a reaction to actual rising costs. What happened then is that they raised prices higher than the costs ended up being, and they did not immediately correct this, until they started seeing buyers change their behavior where they now feel the pressure to lower prices again (in order to sell more).