Greedflation, or profit-driven inflation, is being aggressively debated. Let's revisit economic theory.
This is not on the right track IMO. The theory presented here doesn't help, because no "greed index" or desired profit margins increased. (As a producer/businessperson, I can tell you that desired profit margins are always infinite.) "Greedflation" is not a thing that anybody is claiming. *Achievable* profit margins increased. For whatever reasons.
Easiest understanding of that: firms (at least perceived that) they were facing steep demand curves: Price increases had limited impact on quantity sold, aka low elasticity of Q to P. Their pricing-related comments on earnings calls made that crystal clear. And it seems their perceptions were right
At the extreme: If the demand curve is vertical, increasing prices is printing *pure profit,* straight into owners' pockets. (Vs. boring revenue gains from >er Q. Yawn, so old-school.) Ka-ching. Who's not gonna do that?
Now: *why* the steep (perceived? actual?) demand curve? There's the question. Corporate concentration comes quickly to mind. If there's a limited choice of sellers and they're all raising prices... Where ya gonna go?
Thanks for listening.